Are prices rising in grocery stores? Farmers also face higher input costs

Just under a year ago, Iowa corn and soybean farmer April Hemmes said her crops were selling for double what they could a year earlier. But, she predicted, “all that means is that our intake will increase next year.”

The top concern for farmers today is rising input costs, according to a report from the Purdue University Center for Commercial Agriculture. “Marketplace” host Kai Ryssdal spoke to Hemmes about the price increases she’s seeing on her farm. The following is an edited transcript of their conversation.

Kai Rysdal: How are you?

April Hemmes: I’m cold, but I’m fine. It went from 80 degrees yesterday to around 20 degrees below the wind chill factor today.

Rysdal: Where were you yesterday ?

Men: So I have to go to Dubai [United Arab Emirates], and yes, they organized a conference on oil and flour processors. So I explained to them how I produce soy in a sustainable way on my farm and [it’s a] great gig until you get home in the snow and frost.

Rysdal: I was just going to ask you, you know, you’ve been globetrotting, but how’s it going on the farm? I mean, how’s the farming business, so to speak? Granted, it’s the middle of winter, but still.

Men: Yes, it is the middle of winter. But right now, we’re prepaying; I prepay everything. So just before leaving, I paid for a bunch of my seeds. And that price, surprisingly, hadn’t gone up as much. But nitrogen is a whole different story. All of our inputs, like everyone else’s grocery bills, are higher – well, farmers are the same way.

Rysdal: Can you get everything you need? I mean, well, wait. So let’s go back. Why are the prices higher? Is it just a request or what?

Men: Well, I tell you what, I don’t know. I talked to my guy about fertilizers and chemicals. So I paid 32 cents a unit for my nitrogen a year ago. This year I wrote the check, it was over 60 cents — so it doubled. And if I had waited until spring, when they implement it, it’s over $1 a unit now. And that’s just nitrogen for corn. Last year I paid about $20 a gallon for Roundup. And this year, it’s almost $75 a gallon.

Rysdal: That’s crazy. Do you get all that back? I mean, is your price per bushel going up? Or not?

Men: Well see, that’s just it. Our prices are dictated by, in the case of grain, the Chicago Board of Trade. If you raise cattle or pigs, it depends on whether you have a contract with the slaughterhouse or whatever. But we can’t say, “Hey, I need $6 a bushel for my corn to break even.” This is not reality. So, you know, I hope none of the consumers listening are blaming farmers for high grocery prices. Because, you know, we realize the same thing.

Rysdal: It must be a supply chain issue, right? There must be so much demand or there is a reduced supply, right?

Men: Can I say the word “greed” here? I do not know. Sure, I might have suppliers a little upset with me, but there are very few people who actually produce nitrogen. So, you know, they can kind of fix the prices. And we have problems. My supplier can only guarantee me 80% of the Roundup or certain types of chemicals I can get. So luckily, you know, I’ll make money if those prices stay high. But that’s a big if.

Rysdal: What’s the word around coffee? I mean, are your neighbors in the same boat? They must be. Do they change anything?

Men: Oh yes, they are all in the same boat. When I spoke to my seeders – as I affectionately call them – I said, “So are farmers turning to planting more soybeans?” Because fertilizer prices are mainly for corn. Soy doesn’t need a lot of inputs. And they said yes, they are seeing more soybean sales. Which, for Iowa, is unheard of. We like to plant corn here.

Rysdal: How long until you start putting seeds in the ground?

Men: Beginning, mid-April. But we need humidity, we are still dry. So I hope everything will be better by then, Kai. Can you work on this for me?

Rysdal: I will do my best for you.

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