Fuel Costs Hitting Farmers Hard [View All]

[CShine]

Nationwide, the increased energy costs means it will take $800 million more to bring in this year's crop than it did in 2003, according to projections from the American Farm Bureau. The 2003 tally was $2.6 billion higher than the cost to harvest the 2002 crop, again because of higher energy prices, said Troy Bredenkamp, who monitors fuel and energy for the Washington, D.C.-based organization.

"And it shows no sign of letting up," Bredenkamp said. "It's not good."

A gallon of diesel for farm use costs about $1.39, up from about 90 cents a year ago. Farmers don't pay road tax for their diesel so prices are still below those at commercial pumps, where a gallon is close to $1.80 in West Texas. The price of fertilizer and the energy for irrigation are up, and by as much as 40 percent, said Jay Yates, an economist with the Texas Cooperative Extension in Lubbock. Ninety percent of the cost of nitrogen fertilizer is based on the price of natural gas.

The continuing energy increases this year come just as farmers were feeling optimistic. They were anticipating good returns because of stronger commodity prices across the board, Bredenkamp said. "Unfortunately, these are being eaten up as soon as they're being realized with higher energy prices," he said.

http://ap.tbo.com/ap/breaking/MGBMRCJVBVD.html