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June 2006

Gas Prices Leave Farmers and Ranchers Coming Up on Empty


Bob Stallman
President
American Farm Bureau
By Bob Stallman
President, American Farm Bureau

Summer is just around the corner. It is a time when families should be packing up their cars or minivans and heading out to a beach, national park or other destination for their annual vacation.  But with gas prices skyrocketing and no decrease in sight, our nation’s interstates may be less traveled this summer by families who just can’t afford to be on the road.

Unfortunately, high gas prices are affecting a lot more than beach vacationing. Farmers and ranchers are feeling the pinch from fuel and natural gas prices. And since producers are price takers and not price makers, energy prices are dealing U.S. agriculture one swift blow.

Price Takers, Not Makers

With farmers and ranchers having to absorb extra energy costs, many are wondering just how long they can stay in the game. Take for example Sylvania, Ga., farmer and former AFBF Young Farmer and Rancher Chair Ben Boyd. He spends more than $1,300 daily just fueling up his tractors. According to Ben, that’s twice what he was paying two years ago.

It is not just fuel costs that are hitting farmers in their wallets. Natural gas prices continue to take its toll on U.S. agriculture. Fertilizer costs for Ben have shot up 48 percent in the last three years, with an added cost of $54,000 per year. And it’s not just Ben facing the burden of increased energy costs, it stretches from farmer to farmer, impacting every commodity throughout the country.

What used to cost $36 dollars an acre several years ago to produce corn, now costs $64, which has many farmers thinking twice about how much they can absorb before calling it a day. And that, says Ben, becomes a matter of national security.  “If people like being dependent on foreign oil, they’re gonna love being dependent on foreign food,” he says.

A Lot of Balls in the Air

So what is Congress doing to ease the pain at the pump and across the agriculture industry? In my opinion, not yet enough.

Opening the Outer Continental Shelf and the Arctic National Wildlife Refuge for energy exploration are two provisions Farm Bureau supports in any energy package. While there is no silver bullet to lower fuel prices, opening the OCS and ANWR would certainly help while lessening our dependence on foreign energy sources.

Congress needs to act sooner rather than later. With summer recess quickly approaching, it is leaving a lot of balls in the air, as well as families stuck at home. More importantly, without an energy package, farmers and ranchers are left scrambling to find ways to meet escalating costs of producing the nation’s food. And they’re coming up on empty.