Ag Matters: High Input Costs Decimating The Hope For ROI

If you drive down any highway across Iowa right now, you see farmers chomping at the bit to hop into the cab of their combines and get the crops out of the fields. But once they hop inside those cabs and sit around kitchen tables, the conversation is far less picturesque.

For the third consecutive year, Iowa’s row-crop producers are caught in a punishing economic vice: high input and equipment costs on one side, and depressed market prices for corn and soybeans on the other. Production costs have surged over 35% since 2021—driven up by skyrocketing seed, fertilizer, machinery, and land charges—while grain prices have steadily retreated.

Lance Lillibridge, a farmer from Vinton, Iowa, put it bluntly when describing the soaring costs during harvest:

Lance Lillibridge

When it costs over a thousand dollars a day in diesel alone just to harvest your crop, breakeven prices rise out of reach fast. Because farmers reinvested their reserves from the strong profit years of 2021 and 2022 to cover previous crop cycles, working capital across rural Iowa is now burning low. Agriculture lenders across the state report that lines of credit are tightening noticeably heading into the fall and winter planning seasons. Iowa State University economic data reveals that the percentage of financially vulnerable mid- to large-sized farms in Iowa has more than doubled over the last three years.

When farming margins erode, the splash damage doesn’t stop at the fence line. It trickles into localized equipment dealerships, rural banks, main-street seed suppliers, and the small-town economies that rely on agricultural spending to thrive. Iowa’s producers are some of the most resilient and efficient managers in the world. They are cutting equipment upgrades, delaying capital expansion, and scrutinizing every bag of seed and pound of nitrogen. But efficiency alone cannot bridge a three-year gap between inflated costs and low commodity prices.

As we look toward the months ahead, protecting working capital, supporting federal safety-net policy, and finding relief on input costs will be critical to keeping Iowa’s farm families and rural communities standing on firm ground.