Originally created 03/31/04

Fuel prices hitting farmers hard this season



LITTLE ROCK, Ark. -- Farmers preparing to plant are including the rising cost of fuel in their business plans, knowing that price spikes will cut into profits.

In some cases, energy prices weigh in farmers' decisions on how they work their land and what crops to produce as they seek to minimize overhead.

"It's a significant part of putting in a crop," said Gene Martin, a senior market analyst for the Arkansas Farm Bureau Federation.

Petroleum products figure into almost all aspects of modern farming, from the cost of diesel fuel in tractors, combines and irrigation pumps to the price of chemicals and fertilizer used in the fields.

The nationwide gas price average over in the past two weeks is $1.80 for all grades, according to the Lundberg survey, which regularly surveys 8,000 stations nationwide. That is a new record high.

Steve Rodery, a Cooperative Extension Service agent in Crittenden County, said farmers are paying diesel prices that are up 30 cents or more per gallon over last year as they prepare their fields and begin planting early crops.

"It's starting to be a concern," he said.

Bobby Coats, an agricultural policy analyst for the extension service, said high global demand is keeping fuel prices up, a trend that is creating significant operating cost increases in agriculture, especially production of row crops. And farmers, unlike other businessmen, can't pass on the increases.

"The producer is not able to pass along energy increases to the consumer. The market will dictate what he receives for his commodity," Coats said.

That leaves production cost increases to come out of farmers' wallets. But there are ways to minimize that overhead.

Martin said many row-crop farmers are using minimal or no-till techniques, using chemicals to kill winter growth and planting in old seedbeds instead of spending the money to turn fields under and create new rows each year. He said doing that saves the fuel that would have been spent traversing two or three times each foot of each acre farmed.

"They're probably doing as much of that or more than in the past to hold that cost down," he said.

Coats said fuel prices can even help determine what mixture of crops a farmer plants. For instance, he said, some may back off on the number of acres they plant in cotton, rice, corn or other crops that require heavy application of nitrogen-based fertilizer.

Rodery said the greatest burden of higher fuel prices may not be felt until later in the season, when farmers begin running diesel pumps to irrigate their fields.

CHARLOTTE, N.C. -- The U.S. Agriculture Department has placed much of the Southeast in the "Abnormally Dry" category, the first of the five drought alert levels.

"As we're getting into the warm season, as precipitation increases and water use increases," it's time to spread the word about low rainfalls, said Ryan Boyles, associate state climatologist.

On Monday, the state's drought Web site showed abnormally dry conditions poking north from South Carolina and extending around 60 miles to the north, east and west of Charlotte.

Charlotte is a few more dry days away from setting a record for the driest March, with only a half-inch of precipitation fallen so far. Forecasters say showers are possible Tuesday, but no heavy rainfall is expected.

Dry conditions are widespread across the Southeast. The Greenville-Spartanburg area has recorded about 57 percent of its normal precipitation since last September, and Atlanta is at less than 65 percent.

The dry spring actually has been helpful to farmers eager to till their fields in preparation for planting. But dry conditions do increase the chances of forest and brush fires, Boyles said.