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Census of agriculture production expenses for southern statesCensus of agriculture production expenses for southern states

Ag expenses are highlighted in 2022 Census of Agriculture showing higher costs.

R. Jamey Menard, Research Leader I

November 21, 2024

2 Min Read
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For the 20-year timeframe 2002 to 2022, Alabama, Arkansas, and South Carolina had the largest production expense increases.Getty Images/iStockphoto

The most recent agriculture Census defines total farm production expenses as “expenses provided by producers, partners, landlords (excluding property taxes), and production contractors for the farm business” (USDA/NASS, 2024).

Based on Census data from 2017 to 2022, all southern states experienced higher overall production expenses (Table 1 in descending order based on change from 2017 to 2022).

Table_1-1.jpg

For 2017 to 2022, the top three states with the highest increases in production expenses were Louisiana (44.4% increase), Alabama (39.5%), and North Carolina (38.5%). The lowest were Oklahoma (15.35 increase), Texas (21.7%), and Virginia (21.6%).

For the 20-year timeframe 2002 to 2022, Alabama, Arkansas, and South Carolina had the largest production expense increases (yellow highlight), whereas Florida, Oklahoma, and Texas had the lowest (blue highlight).

Farm expenses

Total farm production expenses in the Census are comprised of these categories:

1. Fertilizer, lime, and soil conditioners.

2. Chemicals.

3. Seed, plants, vines, & trees.

4. Livestock & poultry.

5. Feed.

6. Gasoline, fuels, and oils.

7. Utilities.

8. Repairs, supplies, & maintenance costs.

9. Hired farm labor.

10. Contract labor.

11. Custom work & custom hauling.

12. Cash rent for land, buildings, & grazing fees.

Related:Average age of farmers increasing according to Census

13. Rent & lease expenses for machinery, equipment, and farm share of vehicles.

14. Interest expense.

15. Property taxes.

16. Medical supplies, veterinary, & custom services for livestock.

17. All other production expenses (defined as storage and warehousing, marketing and ginning expenses, insurance, etc.).

For these categories, the top five production expense categories summed across all 14 southern states were feeds purchased (28.9% of the total $112.3 billion); livestock and poultry purchased or leased (15.2%); hired farm labor (8.5%), fertilizer, lime, and soil conditioners purchased (6.6%); and repairs, supplies, and maintenance costs (5.8%). The five lowest were property taxes paid (2.2%); custom work and custom hauling (2.1%); contract labor (1.9%); medical supplies, veterinary, and custom services for livestock (1.2%); and rent and lease expenses for machinery, equipment, and farm share of vehicles (0.6%).

Agriculture producers face many challenges. Combined with low commodity prices, the rising cost of production expenses highlighted here illustrate the financial squeeze to a farmer’s bottom line.  

The resulting lean profits, diminished cashflows, and increased credit reliance threaten the financial viability of many Southern producers. That is why understanding your cost of production is imperative.

Related:Call to action for ag: It’s time to support veterans

Going into next year, identify your own high expense categories and manage appropriately. 

Source: Southern Ag Today, a collaboration of economists from 13 Southern universities.

Read more about:

ExpensesFarm Economy

About the Author

R. Jamey Menard

Research Leader I, University of Tennessee Institute of Agriculture

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