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Study Shows Farmers' Costs Rising, But Profits Rising More

Kansas State analysis concludes farming has likely never been more profitable.
WTVO/WQRF -- A study finds that farmer's cost per acre when adjusted for inflation is higher now than ever.  The Kansas State University analysis found that seed costs have nearly tripled for farmers since 1975 while machinery costs have nearly doubled -- and that's after adjustments for inflation.

Even with rising costs, however, farming has never been more profitable on a per acre basis.  Adjusting for inflattion, the study found the average farmer makes $42 more in profit per acre than in 1975, a 33% increase in profits.  The reason:  crop yields have exploded over the years.

The study warns there are risks to farmers' profits in the future.  Interest rates will likely go up from near historic lows, and the study also notes that land rental rates for farmland are low as well and likely to rise.

You can read the K-State study here:

http://accc.k-state.edu/research/factsheets/FS5_ProductionAgCosts.pdf
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