Crop Inputs

West Texas Intermediate crude and diesel prices

Source: Energy Information Agency. WTI: West Texas Intermediate Crude Oil. Data as of March 21, 2024

Container rates rise

Container shipping rates more than doubled in January, then held relatively constant for the remainder of the quarter. The Houthi rebel group continues to attack commercial shipping vessels in the Red Sea, forcing many ships to reroute around South Africa. The Panama Canal remains at limited capacity due to low water levels, incentivizing ships to reroute around South America. New environmental policies, including the Energy Efficiency Shipping Index, Carbon Intensity Indicator and Emissions Trading System, are incentivizing shipping companies to slow vessel speeds to lower fuel consumption. These factors are increasing transportation times and the cost to ship goods.

Shipping rate indices

Equipment and machinery prices remain elevated

New farm machinery and equipment prices remain about 40% above pre-pandemic levels as input costs, including steel and labor, remain elevated (see chart below). Access to parts has significantly improved since 2022; however, anecdotal reports suggest some producers still face procurement challenges. Germany’s manufacturing industry, an important source for agriculture equipment, is contracting due to soaring energy costs. This may lead to further supply disruptions in the U.S. While there are significant challenges, used equipment inventories and prices have improved significantly from 2022 levels. Demand may also decline as several agriculture industries face financial stress (see Industry Snapshots for more information).

Agriculture and machinery price index

Source: Producer Price Index