first_imgUnless the debates in Washington throw a shock into the system, Georgia farmers can look fornormal, modest increases in their expenses during 1996. “These prices depend on acreage planted and supplies, which are determined primarily by thegrowing conditions the previous year,” Stegelin said. With no major crop failures last year orgreat increases in planted acreage predicted for next year, he doesn’t expect any major changes inseed prices. Hired Labor Prices have risen steadily since 1988, reflecting the industry’s research and development,registration and licensing, and marketing costs. Stegelin sees no major change in the price trend. Seed Fuel costs could possibly rise if the weather in northern urban centers is unusually severe thiswinter, he said, but aren’t likely to greatly affect the overall input costs, since fuel makes up sucha minor part of farmers’ expenses. Stegelin sees other input costs like this: Fertilizer And nothing else seemed likely to drive costs up or down from normal increases, he said. “Diesel, the prominent fuel used in agriculture, is a residual product to home heating oil,”Stegelin said. “If the early-December cold were to continue through the winter up north, wecould have some fuel price increases come spring. Heading into the end of December, Stegelin didn’t foresee the 1995 Farm Bill or balanced-budgetdebates producing any cost shocks. “Farm input prices generally reflect many factors — demand, supply, policy, institutions,weather,” Stegelin said. “Prices of fertilizer, seed, chemicals and fuel tend to be linked tocommodity prices and acres planted.” Stegelin sees a number of factors that make increased machinery and equipment purchaseslikely: “relatively low interest rates, lower farm debt-to-asset ratios, healthy farm receipts andincomes and an inventory of aging machinery on farms.” “But it wouldn’t have a tremendous effect, because agriculture isn’t that big a user of diesel fuel,”he said. “It’s big to farmers, but there’s probably more fuel wasted at truck stops than farmersuse.” Short-term interest rates may creep upward in ’96 due to Federal Reserve policies to keepinflation under control, he said. Interest rates are likely to be one to two points higher than in1995. Pesticides “Farm input costs will be basically just keeping up with the general rate of inflation,” said ForrestStegelin, an economist with the University of Georgia Extension Service. “Wage rates have trended upward in recent years, reflecting a tighter supply-demand relationshipfor skilled labor,” he said. “Wage rates will likely continue to rise. “With more off-farm employment expected as the economy strengthens,” he said, “either farmlabor rates will increase or mechanization will be stepped up to keep pace with the demand forfood and fiber.” Machinery and Equipment Fertilizer prices have shown the least growth of all the major farm inputs during the past 20years, due mainly to shrinking planted acreage. But Stegelin expects prices to rise somewhatmore in ’96, due to a changing balance in supply and demand. Credit But he doesn’t expect to see great hikes in prices. “I think most of the companies will just be gladto see farmers making some purchases,” he said.last_img

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