World Perspectives

Cost of Production Estimates Show Little Relief, Worry on Margins

Yesterday, WPI discussed the various measures of inflation, and the drop in energy costs which held down the CPI, but not the alternative measures of inflationary pressures which exclude energy. Some of that same dynamic can be seen in the USDA’s most recent cost of production report, forecasting for both 2023 and 2024. Lower natural gas and nitrogen fertilizer prices are reflected in the forecast, but other categories like labor, machinery and equipment, taxes, and insurance are all forecast to increase. With corn prices expected to moderate, this could pressure farmers’ margins this year and into next. Since 2020, in percentage terms, fertilizer and interest rates have seen the greatest increase in costs – both up 78 pe...

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From WPI Consulting

Weighing in on strategic realignment

WPI’s team was retained by the governing board of a U.S. industry organization to review a decision, reached by vote, to invest significant assets into the development and management of an export trading company. WPI’s team conducted a formal review of this decision and concluded that the current level of market saturation would limit the benefits of the investment. Based on WPI’s analysis and recommended actions, the board subsequently reversed its decision and undertook a strategic planning effort to identify more impactful investments. On behalf of numerous clients, WPI has not only assisted in identifying strategic paths but also advised their implementation.

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