Fuel prices hitting America's farmers hard as some fear for their future
Farmers warn high fuel prices will soon be passed down to consumers
Fuel prices are hitting farmers hard
If it’s rough filling up your car’s tank, just think about fueling a fleet of tractors.
LATTA, S.C. – Rising fuel prices are hitting some farmers hard. So far this season, Betty Allen Farms spent tens of thousands of dollars more on diesel than they’re used to. Farmer Keith Allen says these are the most expensive prices he remembers.
"It went from $2.70 a gallon to $4.70 a gallon," he said.
In just over 3 months, a couple million corn stalks will stand in Allen's cornfield. But right now, it’s planting season. One tractor preps the soil, another places the seeds, and a sprayer kills winter weeds. His operation requires 20,000 gallons of fuel per year.
"That’s about two dollars times 20,000. So that’s 40,000 dollars extra," Allen said.
So far this season, Betty Allen Farms in Latta, S.C., spent tens of thousands of dollars more on diesel than they’re used to spending. (FOX Business)
Allen says the spike in costs will eventually affect consumers. Because as the cost of farming goes up, the cost of groceries will likely follow.
"Our nitrogen production is related to the fuel price. So our inputs on our fertilizer side have doubled also, and that’s a bigger chunk of the pie," Allen said.
"Production costs across their entire bottom line are rising and have been rising for the last few years," said Shelby Myers, an economist with the American Farm Bureau Federation.
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The federation says farm production costs are likely to increase 6% in 2022, which follows a 12% increase in 2021. Fertilizers, seeds, and chemical prices are also contributing to the increase. But a possible saving grace for farmers like Allen is the rising price of corn.
Farm costs have risen dramatically over the past two years. (FOX Business)
"Commodity prices have risen enough to cover that increase, we hope," he said.
Allen says corn prices are up because of droughts in Brazil and Argentina. That makes his crops more valuable, at least for the moment.
"You see the stock market move up and down. But commodity markets are moving up and down too," he said.
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"Price is going to fluctuate very dependently on supply and demand," Myers said.
Farmers are warning that the higher fuel prices that they face will soon be passed along to consumers. (FOX Business)
According to the Chicago Board of Trade, corn goes for around $7.50 per bushel as of March 2022. Just six months earlier, it was closer to $5.
Allen said he should be okay as long as prices don’t dip before harvest time.
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"If commodity prices don’t stay as high as they are, we won’t be able to farm next year," he said.
Even if fuel gets cheaper soon, Allen said it’s too late to help. He buys in bulk, so he has already purchased the fuel he'll through the fall. That means those high prices are locked in.