Farmers hurt by fuel tab, but it presents renewable fuels opportunity

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ARLINGTON, Va. – America’s farmers and ranchers have a bright future as producers of all types of renewable energy, but perhaps the most pressing energy issue confronting them today is on the consumption side, according to American Farm Bureau Federation President Bob Stallman.

Speaking June 25 during an energy conference hosted by the Farm Foundation, Stallman said farmers and ranchers are more concerned about energy prices.

These prices are adding staggering increases to the farm-level cost of producing food and fiber.

‘Stuck in middle.’ While the retail prices of numerous items – from food to fertilizer – are increasing due in part to higher energy costs, Stallman said farmers, who are largely unable to pass along higher production costs, are being hit hard.

“Farmers often find themselves stuck in the middle,” Stallman said.

“While they absorb higher energy costs related to inputs and production, they see the eventual retail prices for the food and fiber they produce increasing due to processors and retailers recouping higher energy costs after those products leave the farm gate.”

Energy users. Agriculture, he said, is a big consumer of energy, roughly 1.4 quadrillion British thermal unit annually.

Nationwide, increased energy costs at the farm level will add between $800 million to $1 billion to farm production costs this year compared to 2003.

That is on top of the $2.6 billion higher energy tab farmers paid last year.

“This trend shows no sign of letting up,” Stallman said.

“A gallon of diesel fuel for farm use has increased, depending on the area, between 20 and 50 cents per gallon since a year ago. Fertilizer and energy costs for irrigation are up by as much as 40 percent.”

Opportunities. Today’s energy situation, however, does present farmers with a number of opportunities in the area of producing renewable fuels and wind energy, Stallman said.

Stallman said annual production of ethanol keeps setting records and that this year the United States is on track to produce 3.4 billion gallons.

Today, there are 85 ethanol plants in 20 states. By the end of this year, their production capacity will be 3.7 billion gallons per year.

Nearly half of all existing U.S. ethanol plants are owned by farmers, he said.

Biodiesel. He said the production of renewable biodiesel is another bright spot.

The modest annual gains in biodiesel production could increase total U.S. cash crop receipts by $5.2 billion cumulatively by 2010, and increase soybean prices by an average of 17 cents per bushel annually over that time.

Wind energy. Wind energy also offers opportunities to farmers.

Stallman said wind farms generate electricity while agricultural use in and around them continues undisturbed.

He said federal research labs have estimated that with today’s wind turbine technology, wind power could supply up to 20 percent of our nation’s electricity.

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