Higher Commodity Prices Could Create Higher Cash Rents for Farmers in 2022
Markets and the Bottom Line 040721
The start to 2021 is showing an increase in commodity prices. But as commodity prices trend higher, so do input costs.
"The grain prices have moved up, but really this has been a short issue," says Don Roose, the U.S. Commodities. "It was in the beginning of August last year, we were still on our knees. Prices were just subpar, didn't know what was going to happen from that standpoint, then it's done a 180 on the upside on the grain prices."
Roose says from fertilizer prices to seed prices, farm inputs are also on the rise. And Roose says the next thing to watch is the price you may pay for cash rent next year.
"While rent is pretty well set for this year,I think when you look at next year; you're probably going to be dealing with higher cash rents," adds Roose. "So, you're going to have to try and manage that. We've got 2022 November soybeans are moving up. So you have to watch those targets if it works into price levels that you can manage."
Roose warns there is plenty of room for volatility, as well as risk, so farmers need to work on managing what they can to manage some of that risk for the year ahead.
