[FAIR USE FOR EDUCATION AND RESEARCH PURPOSE ONLY]

Farmers concerned about price of diesel

By JUDY DAVIS, Courier & Press staff writer (812) 464-7593 or jdavis@evansville.net

The price of diesel for farm use was down a nickel at Gibson County Co-op last week, but general manager Jim Elliott doesnt see much hope of normal prices in the near future.

Diesel is typically between 90 cents and a dollar per gallon, he said. Its running about 15 to 30 cents a gallon higher right now. Most in the industry expect those prices to stay fairly firm for at least a couple of months.

Elliott attributed the reduction to reports that some OPEC countries were talking about increasing oil production.

Even if the report is true, he said, it will be at least mid-summer before new supplies hit the market because of the lag time between production and availability.

Lag time is benefiting farmers in another way. The price of products derived from petroleum or produced by methods that use petroleum has not risen nearly as sharply.

Most stocks of fertilizer, for instance, were in place before the price went up, he said.

David Sturgell, with Vanderburgh County Farm Service Agency, said the price increase is a definite concern for farmers.

Almost everything a farmer does requires a tractor or truck, he said, but farmers also use fuel for things like drying grain and irrigating.

Because of the low price of grain last fall, some farmers didnt buy fuel for spring planting. They couldnt have known, last fall, that fuel prices would go up like they did.

Gary McDaniel, who farms about 1,300 acres near Chrisney, Ind., said when diesel is priced between 90 cents to a dollar he spends about $10,000 a year for fuel.

It makes you dig deeper into your pocket, he said. We dont have any way to pass the cost on, because we dont get to put a price on what we sell.

McDaniel said farmers get a break in not having to pay some taxes on fuel for farm use, but its not as big a break as people might think.

For what we use on the road, hauling grain, we pay the same rate as the truckers, he said.

LP gas is about 30 cents higher than it usually is this time of year. We use it to heat greenhouses for starting our tobacco plants and nurseries for baby pigs. My neighbor uses it to heat his chicken house.

McDaniel said no-till, which he has used in varying degrees for about 15 years and almost exclusively for the past five, keeps fuel cost at a minimum. No-till is not an instant cure, however.

It takes some special equipment, like attachments for planters and different chemicals for spraying, he said. If you arent already set up for it, it can be an expensive thing.

McDaniel has already signed up for crop insurance, despite the expense. You wont make any money off it, he said, but if you have a loss it will help you stay in business another year.

http://www.courierpress.com/cgi-bin/view.cgi?/200003/19+farmersconcerned031900_news.html+20000319+news

-- (Dee360Degree@aol.com), March 19, 2000