Relative to crop commodity prices that U.S. farmers received since 1994, agricultural input prices have risen consistently with seed prices almost doubling. According to USDA’s Economic Research Services, this increase was due, at least in part, to the increase in value-added characteristics developed by private seed and biotech-technology companies through R&D programs.
The sharp rise in the price of fertilizer in 2008-09 was driven by a significant increase in the cost of energy and materials used to manufacture nutrient products, as well as rising transportation costs and the falling value of the U.S. dollar. For agricultural chemicals, prices rose relative to commodity prices during 1994-99 but have since fallen. The recent decline partly reflects the rise in crop commodity prices after 2005 as well as an increasing market share for off-patent (generic) crop protection chemicals. (ERR-130, December 2011)
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