Tensions with Iran and higher costs for seed, fertilizer and other items will make the 2012 crop more expensive to grow than last year’s, said Scott Stiles, Extension economist for the University of Arkansas System Division of Agriculture.

 “It will cost more to produce an acre of anything this year,” Stiles said Tuesday as he spoke to a room full of producers at the Prairie County Fairgrounds in Hazen, Ark. Stiles joined other specialists from around the Division of Agriculture as part of a series of winter production meetings that help Arkansas farmers prepare for the challenges of the growing season ahead.

Each year, economists for the University of Arkansas System Division of Agriculture create enterprise budgets that help producers estimate the costs of growing their crops each season.

Stiles made reference to the 2012 Clearfield Hybrid rice budgets that indicate fertilizer costs are up 24 percent, seed costs are up 21 percent, fuel is up 17 percent and chemicals are up 9 percent from last year’s budgets.

Fertilizer retail prices have been higher since mid-2010, but “when corn fell from September to December 2011, urea prices began to come down,” Stiles said. Throughout eastern Arkansas fertilizer prices will vary by supplier, he said “it pays to shop around.”

“Fuel costs are high and volatile,” he said. “Iran will be the most important factor to watch,” Stiles. Crude oil prices are expected to average $100 per barrel in 2012. However, the price per barrel could range from $85 to $112. A price near $130 a barrel or more could be possible if we go to war with Iran.”

Producers can find Arkansas enterprise budgets online at www.uaex.edu/depts/ag_economics/budgets/2012/Budgets2012.pdf.