Staff and wire reports
Maureen Torrey, owner of an 11,000-acre vegetable farm in western New York's Genesee County, is seeing her profit go up in smoke -- diesel smoke.
Torrey normally spends more than $1 million a year on fuel costs, but this year expects to spend at least $300,000 more. She hasn't looked at the projections lately, though.
"It's too depressing," she said. "Fuel is a major input cost for crops and for processing vegetables. There really is no way to make an adjustment. All of our costs have skyrocketed. Everyone is looking to see how they can conserve, but it's tough to cut back on some things."
Roger Sahs, Oklahoma State University Extension assistant specialist, said he's been working to find how much increases in fuel prices will affect local farmers.
Sahs said he used enterprise budgeting software to calculate the total impact gas prices have had on farms. Using a 1,000-acre farm and increasing diesel prices by 50 cents and fertilizer prices by 10 percent, Sahs has calculated how big a pinch farmers will feel.
"In general, the next production year you're forced to make some tough decisions," he said.
The total cost per acre, taking into account increases in fuel and fertilizer, amounts to $5 to $6.50 per acre. Using a 1,000-acre model, costs to farmers are in the thousands of dollars.
"It's a pretty big chunk of change," Sahs said.
Options for farmers are "not win-win" Sahs said.
By tilling or fertilizing less this year, farmers eventually will have to pay for their cutbacks, he said.
"Cutting back now could impact yields and forage production or grazing potential," Sahs said. "They can save money in the short term, but not in the long run."
Sahs said farmers have limited options when dealing with costs, and there is only so much that could be done by farmers to market their crops.
"You can save a dime, and it may end up costing you a buck," he said.
The average price of diesel fuel last week was around $2.73 a gallon, according to the federal Energy Information Administra-tion. That's 82 cents higher than a year earlier and nearly double what it was in September 2003.
The national average two weeks ago for diesel fuel was $2.78.8 per gallon, a 78.6 percent increase of from the previous year the same week.
The average cost of a gallon of diesel fuel for Midwestern states last week was $2.73, a 9.1 percent increase from last week.
Garfield County farmer Joe Peeper said he's just paying the higher fuel costs now simply because there are no alternatives.
Peeper said he hasn't made any significant fuel-saving changes yet, but if prices remain close to $3 a gallon he might.
"I'll get this crop in this year fine, and then we'll see," he said.
Higher prices are expected for propane this winter, something else Peeper said state farmers will be forced to account for.
"If prices stay this high," he said, "you'll see a lot more guys switching to no-till operations.
"It's something we all have to have; there isn't much we can do about it."
Terry Francl, a senior economist with American Farm Bureau Federation, said the Agriculture Department in February estimated U.S. farmers would pay $8.2 billion for fuel this year. Officials expected that number to climb another $2.5 billion with higher prices and the effects of Hurricane Katrina, he said.
"Agriculture is very energy intensive," Francl said. "There's not a whole lot you can do."
The cost of anhydrous ammonia fertilizer, made with natural gas byproducts, has increased by an estimated 25 percent this year. And that was prior to hurricanes Katrina and Rita, according to the Illinois Farm Bureau.
Oklahoma Cooperative Ex-tension Office offers free, confidential service for farmers seeking help with plans for increasing fuel and operation costs.
The program, Intensive Fi-nancial Management and Plan-ning Support, can be reached at (800) 522-3755.
Staff writer Cass Rains contributed to this Associate Press story.
Staff and wire reports
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