Fuel prices costing farmers, too

WOOSTER, Ohio — The skyrocketing cost of fuel will ultimately affect the price of everything — consumers and experts have long said — and that certainly includes farmers.

On-road diesel fuel prices the past few days in Ohio were as high as $4.50 a gallon. Gas prices exceeded $4.15 a gallon.

That’s well ahead of the U.S. Energy Information Administration’s April predictions, which called gas at $3.86 this summer, up more than a dollar from $2.76 last summer.

Getting by

To deal with the higher cost of filling up, veal farmer Matt Ramseyer of Kidron, Ohio, is cutting back on the number of trips he makes to his barns.

“They’re relatively close,” Ramseyer said, but the miles still add up.

Some of his trips are necessary to ensure the calves are OK. But if a trip isn’t necessary, it isn’t being made.

Grain farmers are paying more attention to the number of passes they make across their fields — and are turning to technologies like no-till and minimum tillage to reduce fuel consumption.

These trends are nothing new. But with prices near all-time highs, farmers are seeing even bigger savings.

With “some of this new technology, (farmers are) pushing upwards of more than 20 percent” savings, said Nelson Witmer, owner of Witmer’s Inc., an equipment dealership east of Salem, Ohio.

Better equipment

It all depends on how they use the equipment, and the farm in question, he said. But no doubt, he’s seeing interest in farmers who want fuel-efficient engines, and equipment that steers itself to reduce fuel consumption.

“Less trips in the field means less fuel spent,” he said. “I think farmers are really taking a notice.”

Few Ohioans have taken notice like Joe Wenger, of Wooster. Wenger operates Eyster Harvesting — a five-combine crew that harvests grain from Texas to North Dakota.

In a year’s time, he burns just under 100,000 gallons of fuel, and expects this year his fuel bill will be more than a half-million dollars. Normally, his biggest cost is equipment, but fuel exceeded his equipment cost in 2008, and he expects the two to be “neck and neck” again this year.

But the good news are the grain prices — which are at a near record now and expected to remain strong through the year.

“The beauty of it is, so far, in the last three, four years, the commodity prices in the grain have all went up with it,” he said.

The price of grain doesn’t necessarily mean more profits for Wenger, who custom harvests and does not own the grain. But what’s good for the farmers is usually good for those who work with them, he said.

More efficiency

Robert Cope of Cope Farm Equipment said some of the newer tractors have a variable transmission feature that allows the operator to choose the mode of operation for the chore being done. Modes include light tillage, heavy tillage and transport.

Some of the smaller tractors also are equipped with “economy power take off,” a feature that allows the PTO to operate at a lower engine speed, while consuming less fuel.

“They’re (manufacturers) trying to get more fuel efficient and (find) ways to save fuel on everything,” he said.

Long-term impact

Although prices are bad now, some experts say the effect on farmers will be hardest felt in 2012.

Carl Zulauf, an ag economist with Ohio State University, said many farmers already have their inputs for this year bought.

“The impact is more likely to be on the 2012 crop decisions,” he said.

However, farmers could also feel the impact at this year’s harvest. Since the crop will be planted later than usual, there’s a potential for increased drying costs.

Zulauf said the biggest impact to farmers will likely be how consumers react to their own budgets. The big question is whether consumers will reduce consumption of some of the goods farmers produce, and what the economic impact will be.