Rising fertilizer and diesel prices affect farmers

Caroline Diary

Farmers across the country, including North Carolina, are “taking matters into their own hands” when it comes to diesel and fertilizer prices, which are at all-time highs. The United States depends on and is a major importer of foreign fertilizers.

Factors driving up costs include Russia’s war with Ukraine, limited supply of relevant minerals and high energy costs, high global demand and prices for agricultural products, dependence on imports of fertilizer and the lack of competition in the fertilizer industry.

“Farmers understand that they produce the one absolute essential energy in the world, food,” Rep. Jimmy Dixon, R-Duplin, told the Carolina Journal about the importance of the role of the farmer in the lives of farmers. people. “I don’t think we’ve come up with a system yet that would allow us to get by without food.”

Dixon, a semi-retired farmer, said nearly 70% of gate receipts or farm products sold in North Carolina are livestock, such as chicken, turkeys, hogs and cattle. “It’s an incredible statistic,” he said. “It’s a big part of our agricultural economy, which is the biggest industry in the state. We are approaching $100 billion.

He said about 90% of agricultural production uses diesel engines, which includes transport, seeds, chickens, pigs, produce, etc.

Dixon said farmers have it in their DNA to get up and go and get the job done, but there is some concern about the trends that are happening with the economy.

“It drastically affects the thinking of every farmer I come into contact with,” he said. “There is increased anxiety about who will survive and who will not.”

Ralph Britt of Britt Family Farms near Mount Olive in Duplin County and Wayne County grew up on a farm and worked in agricultural chemical sales for 10 years after completing his master’s degree at Carolina State. North. He’s been a full-time farmer for 28 years and told the Carolina Journal that diesel and fertilizer prices are historic.

“Some of our fertilizers have quadrupled from last year,” he said. “Nitrogen is produced from natural gas and a process that produces it. Fuel is double what it was last year. The cost of transportation is driving up the cost of inputs, delivery costs are all going up, but our biggest increase is in fertilizer. »

Britt said they’re using 500 gallons of diesel a day and it’s well over $4 a gallon, almost $5 in some areas, up from less than $2 last year, that’s definitely having an impact.

Britt’s main crops are corn, soybeans, small grains, cattle, cattle, hogs, broilers, sometimes sweet potatoes and peanuts. He plans to plant 1/3 less corn and replace the acreage with more soybeans, mainly due to rising fertilizer costs. He said 99% of corn produced in the United States is used in grain feed for livestock, which will impact the cost of beef, chicken, pork and sausages. About 10% of feed-grade corn also goes into the petroleum supply, which impacts the cost of ethanol.

He said that in addition to an increase in livestock costs, people would also see an increase in the costs of fruits and vegetables. This comes after COVID, when supply chains were already struggling and there weren’t as many people working. There was a particularly significant shortage of truck drivers. All these factors have led to a decline in agricultural production.

While Britt isn’t sure the current situation will impact his farm’s ability to get paid for production, he said they will definitely have to invest a lot more money into their crops this year.

“An example would be a margin on an acre of corn for $100 per acre,” he said. “Last year, we would have invested $500 in variable input costs to grow this corn crop and earn $100. This year, that investment would be more like $800 or $900 per acre to get the same return. »

“It’s going to be a very high risk year,” Britt said. “We have a chance of having a good year if we have a good harvest and we manage to sell it. But our budgets are double what they were last year.

Britt said they invest a few million dollars each year in their row crop operation. Although they have taken some people out due to COVID and have struggled to fill positions, they are currently doing well with their workforce, despite rising costs.

“Nobody’s making minimum wage anymore, that’s a moot point,” Britt said. “It’s a political ploy. As a general rule, our wages are double those of the farm. Our payroll is significantly higher than a few years ago.

Britt said they are also struggling to get hold of lime, one of the staples needed for farming. It is used to modify the pH of the soil. Since the southeastern US doesn’t have one, they normally get it by barge from Canada or train from Tennessee. But with ongoing issues with barges around the world and the fact that the rail system has fallen behind in delivery due to COVID, supply is almost non-existent. He said they didn’t run out of nitrogen due to planning ahead, but will need to buy some throughout the season.

“The risk of planting this crop and not having fertilizer available to feed it could be a disaster,” Britt said. “If we don’t have the extra fertilizer that we will need in May and June to feed this crop, the crop will not produce. Supply issues are definitely an issue.

He said that while some tariff protections put in place for the fertilizer industry may have driven up costs, primarily, the situation between Russia and Ukraine and post-COVID supply issues had the most great impact.

“We were hoping to get back to normal, and that didn’t happen,” Britt said. “The political climate around the world hasn’t helped either. I don’t mean to be political, but the things that have been done for political or environmental reasons to slow America’s fossil fuel production have bitten us from behind at the worst possible time.

Britt said while there may not be a quick fix to the problems rising costs have created, he hopes the country can learn a lesson.

“The one thing I hope we’ll learn is that we can’t depend on China for chips or the Middle East for fuel or Russia,” he said. “Even though a microchip may be cheaper in China, for us to completely depend on it in the long term is not in our economic or national security interests. The whole ‘Made in USA’ thing is more important today than it ever was. We cannot be dependent on an adversary who could hold this above our heads in the event of sanctions or political wars.

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