Axios
-Diesel prices are soaring just as the energy-thirsty peak of harvest
season looms for many of the country's largest crops. It's a double whammy for
farmers, with the Iran war also causing much higher fertilizer costs that hit
months ago.
…. The diesel market is tight and
expensive for two main reasons: the throttled Strait of Hormuz, and the
Ukrainian attacks on Russian refineries that have prompted Moscow to reduce
exports.
Fuel is a major input cost for
farmers, who use diesel for combines, preparing fields, transporting crops to
storage, irrigation and more. And farmers typically can't pass those costs
along to crop buyers.
"[For] farmers, there's an
old saying in agriculture: they buy retail and sell wholesale," said John
Newton, VP of public policy and economic analysis at the American Farm Bureau
Federation.
Peak harvesting starts next month
for corn and soybeans — the country's two largest farm commodities — and
several other crops, though specifics vary by location and product.
"Harvest is the single
operation that uses the most fuel and runs from now through November for most
of the country," said Drew Kientzy, a University of Missouri agricultural
analyst.
….Diesel is the bulk of farms'
total fuel costs.
It's an important and now rising
expense, though typically smaller than costs like labor and other services,
seeds, and fertilizer, per Newton and Agriculture Department data.
[Jed] Bower, who holds the
rotating presidency of the National Corn Growers Association, farms around
1,100 acres. He expects to pay an extra $20,000 to $25,000 in diesel costs this
year compared to where prices were in January.
…."The way our input prices
have been, there's no way I can make a profit this year, and all this is going
to do is bury me further," he said.
