Growers struggle with cost of diesel
By Dennis Hill
Published in News on July 23, 2008 1:48 PM
The soaring cost of fuel has squeezed farmers to the breaking point, agricultural experts say, with the cost of running heavy equipment nearly doubling over the past year.
There are more than 170,000 acres of land under cultivation in Wayne County and all of it has to be criss-crossed multiple times by tractors and harvesters, which don’t come in economy-sized models, Wayne County Extension Agent Kevin Johnson said.
News-Argus/Bobby Williams
Keith Waller fills up a tractor with diesel fuel on his family farm in the Smith’s Chapel community near Mount Olive. It takes more than 100 gallons of fuel to fill up the big rig. Waller says farmers are having to be more precise in their approach to work to save as much as possible on the cost of putting in a crop.
“The average American citizen can cut back on trips to town, maybe buy a smaller car. But there are no fuel-efficient tractors, there are no hybrid tractors,” Johnson said. “The farmer doesn’t have any options. They’ve got to have that big equipment, planters, sprayers, harvesters .... You’ve got to have that horsepower.”
The price of off-road diesel fuel has gone up 88 percent in the past year, Johnson said. Most heavy farm equipment uses diesel fuel, which runs about 30 cents per gallon cheaper than the highway version, but is still higher than premium gasoline.
And unlike some businesses and consumers, who can cut back on fuel consumption, farmers have little or no wiggle room when it comes to how much fuel they have to burn to put in a crop.
“You have to do what it takes to get the maximum yield,” he said. “You have to take care of your crop.
“You can’t not do it,” he said, referring to spraying fertilizer or weed killer on a cotton field. “You’ve got to do it.”
A 100- or 120-horsepower tractor can burn 100 gallons of fuel a day. That’s more than $400 a day just to stay in the field.
For a cotton farmer, that means making 5-6 passes across a field during the growing season — from planting, to spraying to harvesting. For soybeans, it means 3-4 trips.
For tobacco — still the most profitable crop in North Carolina — it means twice that many trips across a field. Tobacco is labor intensive. Farmers have to transplant it, spray it, remove its top flower and suckers, then harvest it over at least 3-4 stages.
The result is a fuel bill that would make any highway driver blanche.
And the cost doesn’t stop there. Tobacco needs propane for curing, and lots of it.
It takes from 325 to 350 gallons of propane per barn per curing. That adds up fast. The cost of the propane that is used for most curing has gone up right along with diesel, Johnson noted. And Wayne farmers have planted nearly 10,000 acres of tobacco this year, a slight increase over last year.
Johnson said people see relatively high prices for commodities but don’t realize that the costs associated with production are rising much faster than the payout.
“A lot of people see high commodity prices and think the farmer’s got it made,” he said, “but those prices aren’t going up as fast as the cost of fuel.”
And while some farmers can withstand the price crunch better than others — the bigger operations can buy fuel in bulk and save some money — the effect is hitting farmers of all sizes, he said. Even the big operators are feeling the pinch.
“It’s just unbelievable what’s happened,” Johnson said. “The situation right now is kind of bleak.”
So what are Wayne farmers doing about it?
“They’re just going about their business as usual,” Johnson said. “They’ve got to.”
Keith Waller farms tobacco, wheat, soybeans and hogs with his father and grandfather in the Smith’s Chapel community in southern Wayne County.
“It kind of stays in the back of your mind,” Waller said, referring to the cost of fuel. “We always try to carry enough stuff to do the job without having to make an extra trip. We try to eliminate as much driving as we can. But you still have to scout your fields. “
Waller said farmers cannot cut corners to the extent that it undermines the quality of their crop. For example, he said, their tobacco is sold under contract and the buyers demand a good product that requires a certain amount of propane to cure properly.
“You’ve just got to be more precise with what you’re doing” he said. “You’ve got to know how much it’s costing you.”
Andy Evans farms tobacco, corn, wheat and soybeans in northern Wayne County. He said farmers are hurting because of the high cost of fuel but don’t have any choice but to continue to work as they have.
“We have to make a certain amount of trips across that farm,” Evans said. “We’re just having to do the best we can. You can’t cut but so much.”
Adding to the farmer’s woes is the cost of fertilizer, which has skyrocketed. Part of that increase is due to fuel costs, Johnson said, but it’s also being driven by increased demand from other countries.
Another unforeseen cost is about to hit, too, he said.
Flooding in the Midwest has hurt corn production. Corn hereabouts is already dying from lack of rain. With corn prices expected to shoot up, the owners of the millions of hogs, turkeys and chickens in Wayne and surrounding counties will find it increasingly expensive to feed their livestock this year, Johnson noted.
“We’re going to be in a lot of trouble if Goldsboro Milling or Case Farms has to pay $10 for corn,” he said.
And, he added, those big companies are having the same problem at the gas pumps as everyone else. Each has a huge fleet of trucks necessary to keep the livestock fed.
“They’ve got to roll those trucks,” Johnson said.
Evans said farmers have been among the first to feel the real pinch of high fuel costs and that the higher prices will soon begin to show up throughout the rest of the economy. Americans, he said, are going to have to make some tough choices until another answer is found.
“This is just the tip of the iceberg,” he said. “We’re going to have to decide what’s important and what isn’t.”