Central Illinois farmers planting their corn and soybean crops are paying fuel prices 113 percent higher than four years ago, according to a University of Missouri energy economist.
Fertilizer prices - largely based on energy costs due to the petroleum products comprising fertilizer - have increased 70 percent during the same period.
Lori Wilcox, UM Food and Agricultural Policy Research Institute economist, expects fuel and fertilizer prices to increase 10 percent to 15 percent this year. In fact, she sees no relief in sight. Her projections show fuel and fertilizer costs increasing for the next 10 years above 2005 levels.
Abner Womack, FAPRI co-director, said the trend is unprecedented. In the past, energy prices would come back down following a spike, he said.
Farmers' concerns about soaring energy costs were reflected in planting intentions this year. Illinois farmers said they would plant 11.4 million acres of corn, 6 percent less than last year. They said they'll plant 10.1 million acres of soybeans, an increase of 600,000 acres from last year.
Missouri cohorts followed suit. Farmers there plan to reduce corn acreage by 11 percent and increase soybean acreage by the same amount. That's because it costs an estimated $124 per acre in fuel and fertilizer costs to produce high yielding corn. That compares to $38 per acre for soybeans.
Soybeans don't get fertilized with nitrogen because the plants make their own. Soybeans also require fewer trips across the field, reducing fuel costs.
Monthly fluctuations in diesel prices over the last six months have ranged from a decrease of 52 cents per gallon to an increase of 27 cents per gallon, according to Wilcox. At a price of $2.22 per gallon for farm diesel, the per-acre cost of fuel to till, plant, spray and harvest a crop would be about $11 for corn and $7 for soybeans.
Tillage choices impact fuel use.
Farmers can achieve some serious fuel cost savings by using reduced tillage systems, such as strip-till and no-till. In fact, a University of Illinois study showed tillage boosts costs by $9.50 per acre and increases fuel use by 2 gallons.
Gary Schnitkey, U of I Extension farm financial management specialist, said strip- and no-till use about 2.4 gallons per acre. Traditional tillage practices use 3.7 gallons per acre. At $2.50 per gallon for diesel fuel, traditional tillage costs about $3.25 more per acre than strip- or no-till.
Strip-till uses only one tillage trip for application of anhydrous ammonia fertilizer. No-till uses no tillage at all. Traditional practices often include one pass with a field cultivator prior to planting and a chisel plow pass following harvest on land previously planted to corn.
Schnitkey noted farmers need to weigh using reduced tillage systems against possible yield losses or increased pesticide costs which may occur from using the practices.
Heading to a new pasture
This column will be my last for The Pantagraph. After covering agriculture for 28 years, it's time to move to a new pasture at Bloomington's Country Insurance & Financial Services, where I'll work in media relations.
The agriculture industry's evolution in the last three decades has been astounding, to say the least. Astonishing advancements in technology have increased food production efficiency by a hundred-fold.
But the industry's people - farmers, implement dealers, seed sales representatives, bankers, university specialists, agrichemical dealers, grain elevator managers, attorneys, commodity brokers, government agency employees, agriculture teachers, FFA/4-H members and conservation technicians - remain passionate, hard-working and stalwart. They are rooted, literally, in Central Illinois' rich soils.
It has been a supreme privilege to have been invited into and accepted within your ranks.
And always remember - if you eat, you're involved in agriculture.
