Is there a point where fuel expense stops farmers from farming?

[HereSince1628]

With fair regularity we read about the switching point from guzzlers to economy cars, and about when urban/suburban dwellers would switch to public transport. And we read about how retail prics are hurt by transportation costs.

But at what point do fuel costs interfere with farming? At what point does fuel cost become so expensive it will require government to subsidize farmers' fuel costs to get crops in and out of the field?

[monktonman]

1. yeah, when they refuse to go organic.

[unblock]

2. since fuel costs aren't a local phenomenon, food prices will just rise

in fact they already have gone up quite a bit.

[TheFarseer]

4. sorry, but that's not exactly right

Farmers have no way of passing on costs and the grain elevator does not give a sh*t if their costs are high. The only way food goes up because of oil/gas/diesel is the shipping costs and possibly the manufacturing costs. If fuel costs become unbearable to farmers, then they will either get bailed out by the government or go out of business like the Reaganites want, but they can certainly not demand higher prices.

[ewagner]

6. Yes, but....

(I hate to lead off like that)....

you're right...food prices will rise but the farmers will see only a small percentage of the increase. The ultimate retailers will reap the profits even though they will experience very little of the impact of increased fuel prices.

This is true because the farmers have almost no control whatsoever over the market price of their product. It's set artificially and by the brokers and retailers. True, it will cost them more to produce the food but any increase they realize for their crops will be a result of "trickle down" from the market-makers.

The American dairy farmer is the only businessman in the world who allows his product to leave his site when he has no idea of what he will be paid for it....it's a shameful system.

[TheFarseer]

3. Interesting question

We're not there yet. At $10 a gallon though, who knows. Of course you know, the long term republican plan is to break farmers one way or another and get the corporations in. We irrigators are praying for a wet summer though, that's for sure.

[endarkenment]

11. It isn't just tractor fuel.

Big agriculture is highly dependent on fertilizers and other production related products that in turn are derived from fossil fuels.

The upside of all this is that farms will become more local and farmers will move back to less petro-chemical intensive (i.e. natural) methods of farming. But what will become of all those exurban macmansions?

[Toots]

5. I know it sure plays hell with fishermen

The trucking Industry is not liking it either. Everything in this country is moved by truck so the price of fuel effects everyone in one way or another.

[Jim Warren]

7. We'll all need to rethink the 3000 mile salad.

Organic and local, these won't be whim or preferences in the near term future.

Oh and BTW, water.........or lack of it too.

[newportdadde]

8. Midwest farmers(like Missouri) are more worried about rain right now.

My father doesn't farm row crops(corn/beans) any longer but did up until the early 90s, he does however still run cattle. He is greatly concerned right now with the lack of rain that has fallen in the western side of Missouri. We just came out of the warmest Feb in history(with little rain) and now have had virtually zilch this spring so far.

Iowa is doing better though, but the flipside to that is a great crop in Iowa and a poor crop in another region kills the farmer who got hit with a drought, low prices and low output.

Does gas price concern him? Yes definately, but his primary concern now is what is shapping up to be a really ugly drought. Also although the cost of diesel directly effects the farmer other costs hurt as well, such as the cost of wood, the cost of steel, both have risen rapidly the past few years.

Passing on costs isn't an option either, the market dictates price, and often such as the packers of meat is controlled in a pretty much monopoly environment. Food for thought - corn has hovered around 2.00 a bushel for generations.

If you buy a pound of hamburger at the store a farmer will see much much less then that, perhaps 70 - 90 cents a pound etc for the animal.

[RaleighNCDUer]

10. Is there any part of the country NOT in drought?

You say here the mid-west is in drought. There's another thread talking about the drought in Arizon and New Mexico, which is exacerbated by low precipitation and resultant low snow melt feeding the Colorado River, meaning much of the Rockies is in drought. Here, in NC, we've been on water restrictions for a year. We've all read about the wildfires in Texas and Oklahoma.

What about the rest? Northeast? Upper mid-west? Northwest?

[melm00se]

15. Drought map

[Sinti]

19. Idaho, where I'm staying. We've gotten more rain than we can use. n/t

[RaleighNCDUer]

25. Nice find. Thanks. nt

[Lerkfish]

9. already going to happen this season in ohio, less corn, more soy

apparently (I'm no farmer, but this is what I heard), rising oil prices make corn less cost effective so farmers will switch to soybeans.

[gatorboy]

12. I'd be more worried about trucking.

Someone's gotta drive that food from point A to point B and there are a few truckers I know that must supply their own gas (Big Business cuts, y'know?). The trucking industry is really gonna get hit by this. And that will effect the economy quite a bit, I'd think.

[HereSince1628]

17. Fuel for planting, fuel for applying insecticide, fuel to pump water

to irrigate, fuel to run the harvesters, fuel to dry the crop, fuel to ship it to the elevators.

And that isn't to mention the use of petroleum to manufacture fertilizers, insecticides, and the fuel used to get those things from the manufacturer to the farms.

Farming is fuel intensive most people don't realize it.

At some point farmers are going to be better off playing the commodities market with no crops in the field at all.

[gatorboy]

21. There's always Soylent Green

[HereSince1628]

22. Only if ConAgra makes it into frozen dinners based on Arkansans.

[gatorboy]

23. Heh!!

Was that a dig? :P

[HereSince1628]

24. One shovel full follows the other...

[Coyote_Bandit]

13. Every generation of my family on both sides until mine

has earned their living farming and ranching. My brother was well positioned to continue in that tradition and did so for a number of years. But about 5 years ago the family liquidated the farm and left the agriculture industry. While our operation was not particularly small, it was not large enough to compete with the corporate farms. For years energy prices have been rising faster than prices paid for products produced. Add that to mad cow, bird flu, genetic engineering and pesticide concerns and you have a highly volatile and depressed market for smaller agriculture producers who do not enjoy the economies of scale that large producers do. And, unlike our circumstances, most small to moderate size farm and ranch operations are saddled with heavy debt. Farming has become a corporate endeavor and until the competitive environment changes there are not enough subsidies available to enable small to moderate size farmers and ranchers to be competitive. Energy costs are an issue - but only one of many. Small to moderate size agriculture operations were struggling for survival long before the recent increases in fuel costs.

[slackmaster]

14. Only when it drives the cost of food so high people grow their own

I never buy their lousy "tomatoes" anyway.

[kestrel91316]

16. I can see a time in the not-so-distant future when the AMISH

will be laughing all the way to the bank.

Oh, wait. Many of them already are, and have been for a couple hundred years. They are rather more prosperous than their struggling conventional-farming neighbors, for the most part.

Farming with horses/oxen may seem to be a thing of the past to us modern folks, but there is still an agrarian culture out there that is not petroleum-dependent. It survives in small pockets across the US and Canada. There are even some non-Amish hobbyists and small farmers that use horses.

We will need these people's knowledge and skills desperately.

[HereSince1628]

20. Amish tend not to produce grain crops for human consumption

Their operations tend to lean toward higher value products. That is why so many of them are in dairy.

[kestrel91316]

27. Well, the way I see it, there is going to come a day in the near

future when grain crops for human consumption WILL be a high-value crop. Like, when we are all having to do without because of the collapse of industrialized agriculture............

The Amish are VERY clever business people, and where there is a demand for something they can produce.......produce it they will.

[RaleighNCDUer]

26. The Missouri Mule is due for a comeback! nt

[Sinti]

18. Tractors run on diesel which can be replaced with biodiesel

There are other elements such as fertilizers to consider, but nothing that can't be overcome. Farmers are being starved out by low return on their work and investment, while ADM and Heartland make fortunes, and the food retailers aren't doing too badly either. More and more non-industrial farms are being sold to build strip malls. I expect we're going to suffer for or lack of foresight sooner or later. No farms, no food, you know.

I'd worry much more about the trucking industry, though. American grocery stores work on a "just in time" delivery method. There are no more than three days worth of food in those stores, and much of their produce comes from thousands of miles away. If you don't live where the food grows, and the trucking companies can't survive given the price of gas, you are SOL. Fortunately, most big rigs also use diesel, which can be replaced with biodiesel.