“Why is your tractor worth more than our house?”
Minnesota sugarbeet farmer Neil Rockstad recalled a kitchen table conversation with his wife while speaking at the 101st annual Agricultural Outlook Forum. She had observed that the cost of a new tractor was worth more than their house.
The already high – and rising – cost of essential farm equipment was one of the common themes at the 101st Agricultural Outlook Forum hosted by the U.S. Department of Agriculture (USDA) in Arlington, VA, on February 28, 2025.
Both Rockstad and Louisiana sugarcane grower Travis Medine presented as part of the sugar panel at the forum. They observed that labor and machinery were among the highest costs in their farm budgets. Much of that machinery is highly specialized for sugarbeet or sugarcane cultivation.
“All of our harvest and processing equipment – especially in the sugarcane industry – is specific to that crop and that crop only. I can’t take my sugarcane planters and go plant anything else with them. I can’t take my sugarcane harvester and do anything other than cut grass with it – and I can tell you, you don’t want to cut grass with a half-a-million-dollar lawnmower,” Medine remarked.
Farm Equipment Costs: 2018 vs. 2025
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Sugarbeet farmer Neil Rockstad shared the increased costs he's seen on his farm.
Rockstad shared that not only is there a large upfront investment for farming implements, but the cost to fuel and maintain them is also extremely high – especially when field work requires multiple tractors. It costs $1,000 a day to fuel just one tractor.
Farmers in Louisiana are experiencing similar budget pressures. Budget modeling conducted by Louisiana State University found that for Louisiana sugarcane farmers, land rent is up about 59 percent over the past five years, fixed costs are up 62 percent and total costs are up 43 percent.
Modern farming and incredible advancements in on-farm practices have increased efficiencies and reduced the need for inputs such as fertilizer and crop protection tools, but is also incredibly expensive.
“We’re pledging our farms, our land, our houses, our machinery against a short-term operating loan, hoping that we can make it to the end of the season without a crop disaster or a significant price downturn,” Rockstad said.
Both farmers noted that crop insurance is an essential risk management tool to help farmers recover and plant again following a crop disaster. Even then, crop insurance does not cover all the costs of planting and cultivating a crop or the lost revenue. Farmers must always plan for the worst-case scenario.
“We have to have enough in our budget to deal with the bad things that happen and just hope that they don’t,” Medine said.
Rockstad and Medine both highlighted the benefits of sugar production to their farms and rural communities. Benefits that would disappear if it was no longer financially viable to farm sugarbeets and sugarcane. Medine noted the “generational aspect of farming” and the need to create a strong succession plan.
More than anything, the farmers noted the urgent need for a five-year Farm Bill to bring greater certainty to the farm economy. The Farm Bill proposals put forth in the last Congress included a strengthened U.S. sugar policy.
Rockstad concluded his presentation with a plea to Capitol Hill: “Congress needs to pass a five-year Farm Bill to provide confidence for us to make all of these investment in a crop.”