Gas Prices Hurting Farmers

Despite reports suggesting that many farmers saw increased profits this year (despite the severity of the summer’s drought), rising gas prices have many farmers worried about the future, especially given the continued failure of Congress to pass a new farm bill.

For the past several months, farmers have been in the grip of a severe and ongoing drought. This summer saw temperatures across the country reach record highs (with some communities experiencing the hottest summer since the U.S. government began recording temperatures at the turn of the twentieth century). The heat, combined with a critical lack of rain, crippled crop production across the country.

Despite the crop losses, however, farmers as an aggregate saw their profits increase. The increase was largely due to generous crop insurance programs and the skyrocketing price of grains like corn and soybeans.

With fuel prices steadily rising, however, many farmers are experiencing increased pressure on their bottom lines. In some states, diesel prices have more than doubled since 2009 (with California farmers current paying about $4.38 a gallon).

For many farmers these increased costs mean fewer passes with farm equipment sometimes resulting in a smaller harvest. In addition, the higher costs mean increased surcharges to people transporting their harvests. Many farmers, fearing competition from overseas producers if their pass these surcharges onto consumers, are being forced to absorb increased production costs. While farmers nationwide may have seen increased profits this year, constantly increasing fuel costs will continue to eat into profit margins, eventually forcing farmers to pass off costs onto consumers.

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Written by: Justin Ellison / Farm Plus Staff Writer