8/16/08 Farm production expenditures hit record high in 2007 The rising cost of fuel and other products helped drive U.S. farm production expenditures to a record $260 billion in 2007, according to the Farm Production Expenditures 2007 summary released by the U. S. Department of Agriculture’s National Agricultural Statistics Service (NASS). Total U. S. farm production expenditures rose 9.3 percent from 2007 and nearly 30 percent from five years ago. Increasing petroleum costs meant farmers not only paid more for fuel, but also for fertilizer products, chemicals, and transportation services. Indirectly, fuel prices and the growth in ethanol production also led to higher crop prices, resulting in increased cost for livestock feed. The NASS report shows that the average production expenditures per farm increased 10 percent nationwide, from $114,186 in 2006 to $125,648 in 2007. On average, U.S. farm expenditures for fertilizer, lime and soil conditioners jumped 26 percent to $8,070; feed costs rose 22 percent to $18,412; fuel costs increased by 15 percent to $6,137; and agricultural chemicals climbed 12 percent to $4,832. On average, 2007 total farm production expenditures for all other states in the western region, which includes Montana farmers and ranchers, increased 3 percent from $141,789 in 2006 to $145,393 in 2007. On average, western region farm expenditures for feed rose 24 percent; real estate and property taxes jumped 14 percent; fuels jumped 12 percent; fertilizer, lime and soil conditioners increased 10 percent; labor increased 6 percent; and interest increased 1 percent. The largest expenditure for this region was for feed, accounting for $4.5 billion in 2007 and 17 percent of farm expenditures. In total, U.S. producers spent $12.7 billion on fuel, including $7.71 billion for diesel, up 15 percent; $2.74 billion for gasoline, up 16 percent; $1.5 billion for LP gas, up 17 percent; and $750 million for other fuels, up 4.2 percent. For all other states in the western region, producers spent $1.25 billion on fuel, or 5 percent of their total farm expenditures. The Farm Production Expenditures summary provides the official estimates for production input costs on U.S. agricultural operations. These estimates are based on the results of the nationwide Agricultural Resource Management Survey conducted annually by NASS. The Farm Production Expenditures summary and all NASS reports are available online at www.nass.usda.gov.