Iowa farmers slash spending as crop prices languish
Production expenses fall, feed largest single cost
George C. Ford
With corn and soybeans prices continuing to languish at low levels, Iowa farmers slashed their capital spending in 2015, according to new data from the U.S. Department of Agriculture’s National Agricultural Statistics Service.
Farmers spent $610 million in 2015 for tractors and self-propelled machinery, down 34 percent from $920 million in 2014. Spending on farm improvements fell 31 percent to $880 million last year from $1.3 billion in 2014.
Deere and Kinze have felt the impact of lower farm implement purchases. Both companies have reduced their payrolls through layoffs as sales have declined in recent years.
Truck and auto purchases by Iowa farmers were down 30 percent to $210 million in 2015 from $300 million in 2014, and miscellaneous capital expenses dropped 25 percent to $30 million in 2015 from $40 million the previous year.
Crop input expenditures also were lower, as seed and plant purchases dropped 8 percent to $2.01 billion in 2015 from $2.2 billion the prior year. Agricultural chemical spending fell 8 percent to $990 million in 2015 from $1.1 billion a year earlier, and spending on fertilizers, lime, and soil conditioners was down 11 percent from $2.3 billion last year to $2.04 billion in 2014.
Iowa farmers spent less on total crop production expenditures — $27.8 billion in 2015, down 13 percent from $31.9 billion the previous year.
Feed expense, which fell 16 percent from $6.2 billion 2014 to $5.19 billion, represented the largest single production expense for Iowa farmers in 2015, accounting for 19 percent of the total. Livestock and poultry purchases, which fell 7 percent from $5.5 billion in 2014 to $5.12 billion last year, were the second-largest expense and accounted for 18 percent of total expenditures.
Farmland rent expense fell 5 percent to $3.97 billion last year from $4.2 billion in 2014, and accounted for 14 percent of the total.