Dothan, AL-As Spring planting approaches farmers are keeping their eyes on soaring gas prices.
Many are hoping this could be a good year with higher commodity pricing, but if the cost of diesel fuel continues to rise, it could lower their profits.
While fields are overgrown with weeds now, by the end of may tractors will have tilled the land and planted crops using a hefty amount of diesel fuel. The average mid-sized farm uses anywhere from 10 to 20 thousand gallons of diesel per year.
“If we see a 50 cent or a dollar increase in cost, then you'll see another 5, 10, 20 thousand dollar expense that's to the farmer,” says Auburn University Agronomist, William Birdsong.
Not only do farmers have to keep their tractors and work vehicles fueled up, there are other expenses that the price of oil will affect.
“Our fertilizer is made with energy costs. Of course transportation, a lot of these fertilizers are bulky, so if the trucking costs is going up that's going to be transferred to the farm, “says Birdsong.
With the struggling economy over the past couple of years, farmers have really had to cut every corner possible. Now with these high gas prices, they say they're going to have to keep searching for other cuts to make, but they are worried they're just not there.
Birdsong also says, “The farmers today are making fewer trips across the field and they've got some bigger equipment to do more when they do go, but there's just only so much that they can cut. You can only tighten a belt so far. Unfortunately, that just means it's going to take some out of their bottom line.”
Fortunately this year, farmers have an opportunity to make a profit.
“Corn prices are up, cotton prices are up, peanut prices are up to the farmer, but it doesn't matter if it's 10 dollars a pound they're not going to get paid unless they produce it,” says Birdsong.
Some farmers are also taking a proactive approach, by purchasing 10,000 gallon fuel tanks and filling them up at a lower cost in fear that prices could get to a level that they just couldn't afford.
Some analysis indicates a 30-percent increase in fuel cost this year, and that comes out to an additional 15 to 20-million dollars in input costs for local farmers.