Farm production prices are up and commodity prices are down.

That creates some financial challenges for farmers across the country, and Big Horn Basin’s farmers are in the same boat.

“Any expense cuts into the income ranchers and farmers have,” said Brett Moline of the Wyoming Farm Bureau Federation.

From 2013 to 2014, nearly all expenditures for farm production increased, according to the National Agricultural Statistics Service (NASS), an extension of the U.S. Department of Agriculture. The report on 2015’s costs will be released around August.

Farm production expenditures in the United States were estimated at $397.6 billion for 2014, up 8.3 percent from $367.3 billion in 2013, according to NASS.

“Our input cost is getting high,” said Powell farmer Lyle Bjornestad.

According to NASS, the four largest farm expenditures make up nearly half of the overall cost of production. Nationwide, those top four expenditures totaled $188.3 billion in 2014. These include:

• Feed: 16 percent.

• Farm services: 11.4 percent.

• Livestock, poultry and related expenses: 11.3 percent.

• Labor: 8.6 percent.

Broken down into an average amount per farm, 2014’s costs were 9.3 percent higher than 2013’s — going from $175,270 to $191,500, according to NASS.

“It has guys scratching their heads — it is not insignificant,” said Wyoming Seed Certification Manager Mike Moore. “The challenge is connecting data from the past with current prices.”

On average, an American farm in 2014 spent:

• $30,680 on feed, compared to $29,779 in 2013.

• $21,818 on farm services, compared to $18,612 in 2013.

• $21,722 on livestock, poultry and related expenses, compared to $16,321 in 2013.

• $16,472 on labor, compared to $15,271 in 2013.

“Each has its own set of circumstances, and it is a challenging world out there,” Moore said.

Prices for parts and tires have gone up, fertilizer prices have stabilized and the only production cost to go down is fuel, Moore said. 

“Fuel price is down, but it doesn’t help the county or state,” Bjornestad said. “The people working in the oil industry are having a tough time. But I don’t know, I’d rather pay higher fuel and have everyone at work.”

Fuel prices are about a third of where they used to be, but it doesn’t offset the increased costs of supplies and repairs, Moline said.

“Repairs are always a large segment of a person’s expenses, and they just don’t go down,” Moline said, noting that while many farmers can and do make repairs on their own, some projects require special-ordered parts, and those can take a couple of days or more to arrive.

“They have gone up significantly,” Bjornestad said. “Operating costs are climbing every year, and when we go to 1980s prices for commodities, it doesn’t work out too well.”

For instance, starters have gone up by about $100, Bjornestad said, alternators and other tractor parts went up as well.

“Parts we buy every year are going up, and parts have gone up a lot in the last four to five years and repair costs are out the roof,” Bjornestad said. “In this climate with commodities low, it is tough to make it come out, but we always look for the brighter spot.”

Big Horn Basin farmers have been paying about $1.20 per gallon for fuel, which has helped out some in the overall profitability, he said.

“A farmer buys retail and sells wholesale and pays the freight both ways,” Bjornestad said. “If the economy was better, maybe the other prices would go down too.”

He estimated tractor tire prices have increased more than 100 percent in recent years. What used to sell for $800-900 is now in the $1,500-2,000 range, Bjornestad said.

“Price of repairs, that is an ongoing large concern; the prices just keep going up,” Moline said. “There is a fine line in how many times can you keep repairing something before you buy new — and as the price of new goes up, you repair.”

A new tractor can easily cost over $100,000, which, like a car, is less likely to break down, but nothing is guaranteed, Moline said.

“The big thing is down time and cost,” Moline said. “If you are in the middle of harvest and a machine is down for a day, that is huge ... it can cost you the crop.”

“About any farmer will tell you the same story — hay and beans are down, beets are down, corn is down, barley went down,” Bjornestad said. “It makes it tough on our end; we have to pinch pennies where we can.”