Despite the dry conditions in the Dakotas and Minnesota, 2021 was a decent year financially for many producers. “Producers with marginal yields probably did okay just because of increased commodity prices and production expenses that were somewhat reasonable,” said Lynn Paulson, senior vice president of agribusiness development, Bell Bank. “That dynamic changes going into 2022 when there’s commodity prices that allow farmers to make a profit, but production expenses will go up. I don’t think we could operate in 2022 with marginal yields, even with these prices, because of increased production expenses.” In addition to higher input costs, inflation will be a consideration. “When you start breaking down the increased cost per bushel with these expenses and conveying that in what you can expect from a commodity, that price squeeze is certainly there. Farmers will have to scrutinize their budgets closely.”
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