Despite a projected 13.5-percent increase in crop output, the principal crop-related expenses are also expected to rise more slowly in 2013. Together, they are forecast to increase $656 million, with seed and pesticide expenses rising and fertilizer expenses declining minutely. During the last 2 years, these expenses increased $11.3 billion, of which fertilizer accounted for $5.6 billion. One factor in the forecast of these expenses--acres of field crops planted--is forecast to fall 0.7 percent in 2013.

The upward movement in the prices-paid indexes of these crop expenses has been the major reason for their increases during the previous 2 years. In 2013, the prices-paid index for seeds is forecast to rise 3.1 percent, for fertilizer 0.2 percent, and for pesticides 2.7 percent. Two factors common to the fertilizer and pesticide indexes--the marketing-year average price of corn and refiners’ acquisition cost (RAC)--are forecast to decline in 2013. The fertilizer price index has also leveled off as the price of natural gas, a major material in nitrogen fertilizers, has fallen over the last 2 years.

Between 2003 and 2011, the annual average prices-paid index for fuels and oils rose 223 percent and expenses increased $9.0 billion (137 percent). The fuels/oils expense in 2012 is forecast to have risen more moderately because of a decline in RAC. In 2013, fuel and oil expenses are forecast to decrease around $250 million (1.5 percent) due to an expected 6.7-percent decline in RAC and the fall in planted acres.

A return to trend yields in 2013 will cause a substantial increase in crop and total output in 2013, which is expected to cause unusually large increases in marketing, storage, and transportation. The latter expense will also be hiked by an expansion in crop insurance premiums, particularly net Federal Crop Insurance Corporation premiums.