Inflation expected to negate farmers' income gains; Vilsack wants iffy production-cost increases investigated

Higher commodity prices since mid-2020 have boosted American farmers' incomes, but inflation and higher production costs are expected to outstrip those gains, according to a recent report from the Federal Reserve Board.

"American farmers are paying significantly higher prices for their weed-killing chemicals, crop seeds, fertilizer, equipment repairs and seasonal labor, eroding some of 2021’s windfall from rising crop prices. Higher farm costs could help push up grocery bills further in 2022, analysts say, following a year in which global food prices rose to decade highs," Patrick Thomas reports for The Wall Street Journal. "Supply-chain constraints and staffing problems are leading to higher prices for products and supplies across a variety of industries, especially food. U.S. inflation hit its fastest pace in nearly four decades last year. Food prices surged 7% in January, the sharpest rise since 1981, the Labor Department on Thursday said, as meat and egg prices continued to climb at double-digit rates."

In a speech to state agriculture officials Wednesday, Agriculture Secretary Tom Vilsack said he wants the Justice Department to investigate whether production cost increases are justified or whether companies are exploiting widespread supply-chain disruptions to unfairly raise prices, Chris Clayton reports for DTN/The Progressive Farmer.