The rising cost of fuel and other products helped drive U.S. farm production expenditures to a record $260 billion in 2007, according to the Farm Production Expenditures 2007 summary released by USDA's National Agricultural Statistics Service (NASS). Total U.S. farm production expenditures rose 9.3 percent from 2006 and nearly 30 percent from 5 years ago.

Increasing petroleum cost meant farmers not only paid more for fuel, but also for fertilizer products, chemicals and transportation services. Indirectly, fuel prices and the growth in ethanol production also led to higher crop prices, resulting in increased cost for livestock feed.

The NASS report shows that the average production expenditures per farm increased 10 percent nationwide, from $114,186 in 2006 to $125,648 in 2007. On average, U.S. farm expenditures for fertilizer, lime and soil jumped 26 percent to $8,070; feed cost rose 22 percent to $18,412; fuel cost increased by 15 percent to $6,137; and agricultural chemicals climbed 12 percent to $4,832.

In total, U.S. producers spent $12.7 billion on fuel, including $7.71 billion for diesel, up 15 percent; $2.74 billion for gasoline, up 16 percent; $1.5 billion for LP gas, up 17 percent; and $750 million for other fuels, up 4.2 percent.

Source: USDA-NASS