WASHINGTON, D.C. (RFD News) — Farm commodity prices surged in 2008, but rapidly rising production expenses prevented producers from gaining comparable purchasing power. USDA’s annual Agricultural Prices summary shows the all-farm-products price index averaged 149, compared with 136 in 2007.
Crop prices produced the strongest gains. The all-crops index climbed from 142 to 168, while food grains jumped from 186 to 258 and oil-bearing crops rose from 137 to 202.
Wheat illustrates the market strength. The marketing-year average reached $6.15 per bushel for hard red winter wheat, $5.20 for soft red winter, $7.16 for hard red spring, and $7.23 for white wheat. Each exceeded the previous year substantially.
Input costs also accelerated. USDA’s ratio comparing prices received with commodities, services, interest, taxes, and wage costs averaged only 82, showing farm revenue gains did not fully offset the expense increase.
The historical pattern offers a warning for today’s producers. Strong commodity prices can improve cash receipts while fertilizer, fuel, machinery, interest, and labor expenses continue narrowing actual margins.
