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As American farmers plant crops this year, grain prices like corn and soy are close to record levels. High prices have increased costs for both farmers and consumers.
While planting corn and soybeans in his fields north of Illinois, farmer Mark Tuttle expects this to be a very good year for the prices of these agricultural products.
“We sold corn for $ 2 for a long time and epwe faced itand now a shin (or 25 kilograms) of corn sells for $ 8. ”
Soybean prices are also close to record levels. This is also good news for farmers.
“But this is being accompanied by rising costs for other things.” says farmer Mark Tuttle.
This includes raising the price of fertilizers and seeds.
“At the time when corn cost $ 2, seed corn was probably $ 80 per hectare. Now the price of seed is 140 to 160 dollars per hectare. “Everything has doubled.” says farmer Mark Tuttle.
The rise in prices has been caused by problems with the global supply chain of cereals such as corn, soybeans and wheat triggered by the coronavirus pandemic and Russia’s attack on Ukraine.
“There is almost no freight from the Black Sea. From the ports on the Black Sea Russia and Ukraine transported almost all grain exports. It is in that area that the transport of 30 percent of global grain exports has been cut off due to the war, and this has also affected corn exports. ”
Mike Doherty, senior economist at the Illinois Farm Bureau, says Russia is also a major international supplier of oil and natural gas. Sanctions against Russia, imposed because of its attack on Ukraine, have reduced Russian oil supplies. This is pushing buyers to seek other markets, causing the price of oil to rise.
“Rising oil prices are actually what is causing the price of chemical fertilizers to rise.” says Mr. Doherty.
Farmers rely on chemical fertilizers to cultivate their crops. But farmer Mark Tuttle says even the rising price of oil, which he uses for his tractors and trucks, is increasing the cost of planting crops.
“I know they want to switch to using green energy sources, but all the farmers’ equipment works with oil and we can not limit our oil supply now.” he says.
The war in Eastern Europe, the drought in the western United States and South America, and the growing demand for biofuels produced from corn and soybeans to offset the rising cost of oil are contributing to rising food costs and rising inflation.
“Inflation is high for us now, it has reached up to 10 percent. “This increase in inflation is affecting farmers and consumers.”
For this reason farmer Mark Tuttle’s expectations on the income he can earn this year have been affected by the level of preliminary spending he will have on cultivating agricultural products.
“Compared to 20 years ago, the volume is very similar, but the costs are higher. Now tractors cost 250 thousand dollars. We used to buy tractors for 80 thousand dollars. So, inflation has aggravated the situation. The standard of living will probably not change much. “We are only dealing with the circulation of the dollar.” he says.
A price structure influenced by the Russian war in Ukraine.
“War is not good for anyone.” says farmer Mark Tuttle./VOA
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