Total production expenses are currently forecast to rise $18.6
billion (6.0 percent) in 2012, following an 8.9-percent increase in
2011 and continuing a string of large year-to-year movements that
have taken place since 2002. Farm-origin expenses and manufactured
inputs have increased 116 percent since 2002, accounting for nearly
75 percent of the change in total production expenses during the
period. The widespread drought is expected to affect production
expenses principally through its impact on livestock feed. Most
crops were already planted before the severity of the drought was
established so only harvest-related expenses will be affected.
Among livestock-related expenses, the price of feed is
increasing--following a 20-percent jump in 2011 feed expenses are
expected to rise another 13 percent in 2012. This chart is from the
Farm Sector Income
& Finances topic page on the ERS website.