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August 29, 2011

Agriculture Using More Green Energy

For more information on Newsline, contact: Kari Barbic, Media Specialist, American Farm Bureau Federation, karib@fb.org.

It’s like two for the price of one. Farmers and ranchers are utilizing more green energy to protect the environment and their bottom lines. American Farm Bureau Economist Matt Erickson tells AFBF’s Johnna Miller how.
Miller:Farmers and ranchers throughout the country are taking steps to change their energy consumption by using more green technology.
Erickson:One of the main reason is to become greener and help the environment, but it’s also to help their bottom line in terms of their production costs. Since January to the end of April we saw oil prices increase by about 25 percent. During that time farmers were planting and they incurred a lot of costs that hurt their bottom line. We saw that on average for five major row crops, it was about 15 percent higher for their production costs. From the end of April until now we’ve seen a decrease by 26 percent. The volatility is pretty outrageous because next year we’re expecting to see oil prices jump up to $101-$102 per barrel. 
Miller:American Farm Bureau Economist Matt Erickson said there are lots of ways farmers and ranchers are incorporating renewable energy: solar power to run the lights in barns, wind to power water pumps for livestock and irrigation, biofuels to run equipment and what is called an anaerobic digester used by hog and dairy farmers. 
Erickson:They’re taking the manure and they’re using it for electricity and for fertilizer. The manure is going through the anaerobic digester and it’s taking the methane gas and using it as electricity for the farmer’s operation, which then can be sold back to the electric grid. Then you’re left over with some dry matter that can be sold back into the fertilizer industry or put back onto the field. 
Miller:But Erickson said programs that help farmers and ranchers with the initial investment to install equipment that can cost thousands of dollars is in danger.
Erickson:There is an energy title within the farm bill. Eight of those programs within the energy title do not have funding after 2012. So where is this money going to come from to build that infrastructure, to build those digesters, those wind turbines, etc? That’s going to be one of the biggest challenges funding because of the budget situation. 
Miller:Johnna Miller, Washington.
Miller:We have one extra actuality with AFBF Economist Matt Erickson. In that extra actuality he explains one part of the appeal of green energy to farmers and ranchers. The cut runs 26 seconds, in 3-2-1.
Erickson:The most important thing is we have to reduce our reliance on foreign energy sources. We import 45 percent of our oil from countries such as Saudi Arabia, Venezuela, Iraq. To fill up a 270-gallon-tank tractor at current prices, let’s see that’s about $1000 per fill up. Now, if oil gets up to $150 back to 2008 levels, boy you’re going to see profit margins really decrease because agriculture is such an energy intensive occupation. 
Miller:Newsline is updated Mondays and Thursdays by 5pm eastern time. Thank you for listening.

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