June 11, 2003 | By: Aimee D. Heald
LEXINGTON, KY.

Knowing the variable cost of production is one of the keys to helping farmers estimate the profitability of their enterprise. A survey recently conducted by the University of Kentucky agricultural economics department will help producers determine prices of common variable costs.

“Variable costs are things like seed, fertilizer, fuel and hired labor to name a few,” said Steve Isaacs, UK ag economist. “The two determinants of variable cost are quantity and price. How much of the input will I use and what does it cost?”

Farmers usually rely on previous experience or production recommendations to determine how much of a certain input to use. Isaacs said that since price is determined by the competitive input supply market, input prices will vary from year to year and may considerably vary among various suppliers.

The 2003 Ag Input Price Survey reports prices on more than 100 agricultural inputs, broken down into categories such as fertilizers, herbicides, seed, insecticides, fungicides and growth regulators.

The survey reports products by formulation or trade name, indicates the units in which the product is sold and reports both and average price and a price range.

“We often think that prices for all inputs always go up,” Isaacs said. “However when compared to our last input price survey in 2000, a number of products have actually gone down in price.”

He said 40 percent of fertilizer products and 31 percent of herbicides actually were lower than the prices reported in 2000.

“With new products on the market every year, the ag input market is very competitive,” Isaacs continued. “Producers can save significant amounts if they do a little shopping around. The survey is a good place to get an idea of the relative prices of products and their price variability.”

The 2003 Ag Input Survey is available on the Internet. Please note, you must have Adobe Acrobat Reader to view the file. If you do not have Internet access, contact your local Cooperative Extension office and ask them to print a copy for you.

Contact: 

Steve Isaacs   859-257-7255