Experts aren’t expecting major downward price shifts when it comes to seed—but changing management practices could save money.
“When it comes to seed there are three levers that determine how much farmers spend,” says David Widmar, co-founder of Agriculture Economic Insights. “Price per bag, trait technology and how much seed a farmer uses per acre.”
“Corn seed expense (shown in orange) was mostly $40 per acre from 1975 through the mid-2000s,” Widmar explains in a recent post on Agriculture Economic Insights. “In 2005, the expense began to increase, reaching a high of $105 per acre in 2015. Most recently, corn seed expense has turned lower in recent years. For 2017, corn seed expense was $99 per acre, a $6.25 per acre decline, or 6% lower, over two years.”
Over the last 18 years, corn seed expense increased by 131%, or increased at an average annual rate of 5.1%, according to chart creator, David Widmar.
“Similar to corn, a significant increase in the per acre expense and share of total expenses occurred since the early 2000s” Widmar says. “While soybean seed expense was previously around $25 per acre and 6% of total production expenses, in 2017 it accounted for $58 per acre and 13% of total expenses.”
Comparing soybean expense in 2000 to 2017, the change over 18 years has been slightly less than corn. In total, seed expense increased by 113%, equal to a 4.5% average annual rate of change.
While exact prices for 2019 aren’t available, USDA found seed expenses for corn and soybeans to be down 1% from 2016 to 2017—$99 per acre in corn and $58 per acre in soybeans. Because farmers can’t control the price per unit of seed, Widmar advises farmers to take a critical look at necessary traits and seeding rates. Also consider potential volume and early order discounts.
Read the rest of the Input Forecast series:
Inputs Forecast: Fuel Prices Higher, Could Be Volatile
Inputs Forecast: Fertilizer Prices Increase For First Time In Years
Inputs Forecast: Resistance Could Increase Pesticide Expenses