Future of Colorado Agriculture

What are the critical trends in Colorado's food, fiber and green production? Will labor, water or cash be the factor that limits agriculture’s success in the next few years? What role do rural communities play in agriculture's future?

Colorado State University is spearheading an effort to discuss, define and consider the potential paths that Agriculture may take in the next generation. We need your help to highlight the important issues and offer your vision of what lies ahead. Extension specialists with the Department of Agriculture and Resource Economics will facilitate the discussion both out in the state and on the internet.

Agricultural sectors are listed on the right-hand side of this web page. Take a look at the agricultural sectors and their respective issues, read the opinion of others, and post your own comments. You can also email comments and suggestions for discussions to futureofcoloradoag@gmail.com .

Monday, December 8, 2008

Input Costs and Agriculture

Input costs increases and their underlying volatility can have a dramatic impact on agriculture. Consider the following relationship between farm fuel prices, fertilizer prices, the value of a barrel of oil and a natural gas price index. (From Henderson, J., “Are Energy Prices Threatening the Farm Boom?”
Main Street Economist, Kansas City Federal Reserve Bank, Vol. III, Issue 5.)

The chart shows a price index for crude oil, natural gas, farm fertilizer cost and farm fuel cost. The index is equal to 100 in January of 2007, so the prices are shown against the benchmark from January 2005 until January 2008. Tremendous cost increases (and risk) are seen from Jan 2007 to July 2008.

What do you think are the key input costs to watch for in the next 1o years? Are Colorado farms well positioned for input cost increases?

3 comments:

Ernie M. said...

James,
I'd be interested in seeing commodity prices (corn/wheat/sobean) on the chart, as well. Do fertilizer prices track commodity prices (i.e. what fertilizer dealers think they can extract from the farmer)? Or are fertilizer prices more directly related to natural gas prices?

Ernie Marx

Levi R said...

I would like to know how or if fertilizer prices are linked to gas prices. Also Iwould like to see what commodity prices will be for wheat as it is the only crop that affects me directly.

Jon B said...

Would increasing the cost of fertilizer increase the cost of fuel for farmers? I would like to see millet represented on the chart for it also affects the economy.