While the agricultural sector as a whole may be enjoying record economic success, rising fuel prices could threaten the profitability of many farmers.

Over the past several years, the agricultural industry has seen explosive economic growth. Agricultural exports are up, commodity prices have reached record highs, and farm incomes are steadily increasing. The overall rosy economic picture has led some to predict a new golden age of farming. However, increasing fuel costs, combined with severe reductions in federal farm subsidies, could threaten the profits of many farmers.

The recent rise in gas prices is particularly tough for farmers who buy fuel in massive quantities. According to one Wisconsin farmer, “Between $12 and $18,000 worth of fuel that we’re going to have to shell out for. And you know every penny makes a difference when you’re talking that many gallons.” The inability of farmers to mitigate the fluctuations of fuel costs also makes it difficult for farmers to cope.

Exacerbating the difficulties faced by many farmers is the cuts to federal farm subsidies. Without strong price protections and with the upcoming elimination of direct payments, some farmers are worried that increased fuel costs could undo the economic gains of the past few years.

To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.

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Written by: Justin Ellison / Farm Plus Staff Writer