This is going to be an expensive year for farmers, with higher prices and interest rates upping the ante for production agriculture.

Interest rates have increased dramatically, jumping 75% from two years ago, said John Newton, chief economist with the U.S. Senate Agriculture Committee.

“So any farmer out there that’s taking out an operating loan to put a crop in the ground, whether it’s a short-term loan or a longer-term loan, it’s going to cost a whole lot more … to get that credit this year,” he said during the latest “Dairy Download” podcast.

With every other production expense increasing to near record levels, having higher interest rates only further complicates the economics, he said.

At a recent farm bill listening session in Arkansas, one producer said this year’s crop is going to the most expensive he’s ever grown. Expenses in every category are up, he said.

“Production expenses are going to be a record $460 billion this year, and that’s on top of last year’s record of $442 billion,” he said.

The challenge is no one knows what’s going to happen to commodity prices, he said.

“So there’s still a whole lot of uncertainty. But what we are certain about is we’re going to spend a whole lot of money putting a crop in the ground or caring for livestock,” he said.

But farmers are smart, and they know how to run their business operation, he said. They’re going to evaluate what crops to plant all the way up through the spring. They’ll be looking at corn to cotton ratios, corn to soybean ratios, he said.

Dairy farmers are always looking at ways to tweak the ration to make it more cost effective. Farmers always look at fertilizer mixes or application rates, and irrigators are looking at better ways to use water.

“So farmers are always looking at ways to best use the resources on their farm,” he said.

And lawmakers crafting the next farm bill are looking for ways to bolster the safety net for producers.

Over the last six years, support to farmers has totaled $93 billion, and 70% of that came from ad hoc support outside the farm bill.

The next farm bill is “an opportunity for us to look at the risk management tools that farmers have available to them,” he said.

Whether it’s Title 1 commodity programs or crop insurance, lawmakers will be looking at how they can work better, increase awareness, make sure there are agents to service those products and make the programs more equitable, he said.

They’ll also be looking to find a way to move away from ad hoc disaster assistance so farmers aren’t waiting years after a catastrophe to get the help they need, he said.