Arkansas farmers will feel the pinch of higher fuel prices this year, says Don Plunkett, area cotton specialist with the University of Arkansas Cooperative Extension Service.
“In December, we were figuring on 90 cents a gallon for diesel fuel for farmers this year. If farmers are buying now, they're paying anywhere from $1.13 to $1.30 a gallon. That's a pretty good jump, and it doesn't look like it will abate anytime soon.”
Farmers require large supplies of diesel fuel to run tractors, combines and other equipment. Prices have ranged from 60 cents a gallon a few years ago to between 80 cents and 90 cents last year.
Kelly Bryant, an Extension economist based in Monticello, Ark., said the same conditions that affect gasoline prices affect diesel fuel. He said the Venezuelan oil strike and uncertainties over a war with Iraq are driving the increases.
Diesel fuel isn't the only higher price farmers will pay in 2003. Nitrogen fertilizer prices are driven by natural gas prices, and gas prices have risen sharply recently. Urea fertilizer has been costing farmers $140 to $160 a ton, but the price could go to $260 a ton.
“That's significant,” Plunkett said.
“Many fertilizer dealers offer incentives in the fall where you can book fertilizer at a certain price and not have to pay until spring,” Plunkett said. “Some farmers took advantage of that last fall and locked a price in that's cheaper than what they can book it for now.”
Meanwhile, Bryant said, some farmers in November and December bought diesel fuel supplies at 90 cents a gallon and still have fuel on hand. “But they may need more fuel before the year is out.”
Bryant and Plunkett said many fields were damaged by ruts caused when farmers had to harvest crops during a wet fall. These fields will need considerable work to prepare them for planting.
“No matter what the crop was, we rutted up fields big time during the harvest season last year. The land is probably going to need two cultivation trips instead of the usual single disking to clean up fields.
“Some farmers, however, took advantage of the dry period in January to get field work done before the high fuel prices hit,” Plunkett noted.
Plunkett said December cotton futures are up to about 60 cents a pound, which, he said, is about 15 cents better than a year ago. That's a good incentive for farmers who can produce two bales or more an acre to grow it again this year, he said.
Bryant believes that some farmers, if they have the flexibility, could switch acreage from cotton and rice, which are expensive to raise, to soybeans, which don't need nitrogen and usually require less tillage and diesel fuel. He said they might not have that option if they're locked into a land-rent situation. A landowner, for instance, might own a cotton gin and want the farmer to continue raising cotton.
For farmers whose land isn't damaged by ruts, conservation tillage (no-till and low-till) can save them on fuel costs. Bill Robertson, Extension cotton specialist, said one farmer he talked to is planning to switch from conventional tillage to no-till on 2,000 acres.
Bryant said farmers need to avoid having to replant their crops, which can be costly.
Plunkett said farmers can reduce the chance of having to replant by monitoring the weather closely. “Plant when the soil temperatures are right to assure a good chance for a stand.”
Lamar James is an Extension communications specialist with the University of Arkansas.