By Mark Boshnack
Staff Writer
Higher fuel costs are being felt on the farm, not only through higher gas prices, but added surcharges on everything that requires hauling, local farmers and industry officials said Monday.
The situation has left Mount Vision dairy farmer Jim Mumford wondering, "Where can I pass it on?" he said.
While milk prices are fixed, haulers and even the company that supplies sawdust for cow bedding have tacked on fuel surcharges, Mumford said.
All this comes at a time when farmers are receiving $15.84 a hundredweight for milk, 47 cents a hundredweight less then they did in January, according to the U.S. Department of Agriculture.
Recent spikes in gasoline and other oil products came toward the end of the harvest season that started in late August, said Delaware County Cornell Cooperative Extension Educator Mariane Kiraly.
As a result of added fuel costs, prices will increase on a variety of farm items that depend upon oil, including agricultural plastics and fertilizer, Kiraly said.
With no break in sight for fuel prices, many farmers are wondering what the impact will be.
This past year, "the price (of milk) has been fairly decent, allowing you to make a profit, but that’s been eaten up by the price of fuel," Mumford said.
He was able to lock in short-term fuel prices of about $2 a gallon through Oct. 31, he said. Afterward, the price could be $2.50, he
added.
In comparison, he said, the price last year was about 80 cents lower.
Mumford said he won’t need diesel fuel for tractors and plows until April, when the use is 400 to 500 gallons a month through the end of harvest.
But he will still use about half that amount for chores such as feeding cows and spreading manure, he said.
What "scares" him the most is the price of nitrogen fertilizer that will be needed for spring, he said.
It is made with natural gas, and prices for that have "gone through the roof," he said.
"Nobody knows where future fertilizer prices will be," he said. The cost has already increased more than $200 to $400 a ton this year, he said, when he used about $6,000 to $7,000 worth of fertilizer to farm 300 acres.
Robert Tracy of East Springfield said that oil increases will have an "impact on everything we do."
His farm uses about 4,000 gallons of diesel fuel on 400 acres, he said.
He wasn’t able to lock in the price as in previous years through Suburban Energy Company, he said, and he has paid as much $2.36 a gallon this season.
Tracy said he "digs deeper into profits" to deal with the prices.
At Suburban Energy Service, formerly known as Agway Energy Products, the company did not offer a lock-in price because of price volatility in February, said David Hachey, manager of the Marcy location.
Instead of prices going down as they usually do that time of year, they were going up, he said.
"It’s a corporate decision that we will revisit in the future," he said.
A year ago the price was $1.59 a gallon, he said, and today, diesel fuel without tax is close to $2.40.
Tracy said that he didn’t know what the price of fertilizer will be this spring, but he said, "more than likely it’s not going to come down anytime soon to where it was."
These types of swings in prices have always been part of the cost of doing business, he said.
Middlefield dairy farmer Sam Dubben said he uses about 2,000 gallons of diesel fuel to farm about 225 acres.
"We are starting to get surcharges on different things," he said, including milk hauling and trash removal.
He said farming is "a great way of life, but it’s a difficult business."
Robert Wellington, senior vice president at Agri-Mark Dairy Cooperative, said that the price squeeze could continue into next year.
USDA estimates for next year indicate milk prices could drop between $1 to $2 a hundredweight, he said. On a 100-cow farm, that could total more than $20,000.
But farmers are taking action to prevent the drop through a voluntary program called Cooperatives Working Together, he said.
It will take steps, including reducing herd size, he said, to reduce supply, which could reverse the trend in wholesale prices.
