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Farmers still feel effects of gas prices

Thursday, June 17, 2004

SIKESTON -- Gas prices may have taken a dip at the pump earlier this week, but farmers are still feeling the impact of high fuel prices -- and it looks as though they will for awhile.

In addition to the higher prices for diesel to run tractors and other equipment, farmers are hit with increased costs for fertilizer and utilities to irrigate fields.

"There's no doubt the increase of fuel expenses has affected the bottom line," said Scott County farmer Patrick Seyer. "What we're paying is somewhere around double last year's price for diesel and irrigation."

Fertilizer has increased about $10 per acre from last year's price, Seyer estimated. Ninety percent of the cost of nitrogen fertilizer is based on the price of natural gas.

Nationwide, the increased energy costs means it will take $800 million more to bring in this year's crop than it did in 2003, according to projections from the American Farm Bureau. The 2003 tally was $2.6 billion higher than the cost to harvest the 2002 crop, again because of higher energy prices, said Troy Bredenkamp, who monitors fuel and energy for the Washington, D.C.-based organization.

''And it shows no sign of letting up,'' Bredenkamp said. ''It's not good.''

To help offset the expense of fuel, Seyer and his fellow farmers are managing a little differently, he said. Instead of working a field perfectly, farmers might save a trip across the field when they can, he said.

But there's still not too much farmers can do.

"We just have to suck it up somehow or another," Seyer said. But David Reinbott, an agriculture business specialist for the Southeast region of the University of Missouri Extension, pointed out sometimes projections may be a little misleading.

"When you hear these numbers, it sounds like a lot, but $800 million may not be that much compared to the overall cost of agriculture, which is in the billions. Fuel costs is usually not the highest part of a farmer's expenses anyway," Reinbott reasoned.

Reinbott isn't making light of the expenses farmers must pay this year to get there crop in. He admitted farmers he has talked to aren't too happy with the increase in prices.

"They didn't like it, but there's nothing you can do about it," Reinbott said. "Farmers are sensitive to it, but they just keep on motoring along."

In general, anytime costs are higher it's going to make an impact, Reinbott noted. "Does it stop them? No. They still have to do those things. They bite the bullet and just keep going."

Garrett Hawkins, director of national legislative programs for Missouri Farm Bureau, said a lot of the concern now is the supply of natural gas and that Americans are relying on imports.

"As domestic production goes down, we've increased imports coming in and yet when they do come in, less and less of the natural gas is going to the production of natural fertilizer," Hawkins said.

Hawkins added the high cost of fuel is just another reminder of why farm groups keep calling for the energy bill, which has yet to be passed by Congress.

"We need a total energy package to increase domestic production of oil and natural gas. We have resources in the United States, but due to regulations, we're not allowed to use them," Hawkins said.

For Seyer and the rest of the farmers, all they can do hope for the best, and Seyer is remaining optimistic. He said: "We're fortunate enough this year that prices are good and crops looks favorable enough that we might be able to offset the fuel prices."

The Associated Press contributed to this report.