Economist tells farmers to look at long-term cost control

An agricultural economist says as commodity prices go higher, farmers can expect everyone else to be reaching into their pockets for some of the profits.  Dan Basse with AgResource Company tells Brownfield farmers need to be more careful with expenses. “I think as you look at it, as you look back at the last bull market in agriculture, think about the price rises in land, in fertilizer, in seed costs, and so it seems for some reason as our fortunes improve by the markets, the people that of course take us along with that follow us very carefully in that endeavor.”

Basse says farmers should try to work now towards controlling some expenses over the long haul. “Think about land rents. Think about landlords wanting more money, and so I tell everyone to manage their risk by trying to get some solidarity to their future. Get land rents that are written for three to five years. Think about maybe getting some contracts on fertilizer or seed, so get as much of your costs controlled as you really can.”

Basse says fertilizer supplies will be tight except for potash and securing product at a good price will be challenging.

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