If I recall correctly it takes about five gallons of fuel to plant and harvest an acre of corn (I just spent 60 seconds trying to remember if that was conservation tillage or traditional. Then I realized that farm management was not the focus of this post, I'll go with 5 gal./acre), so the argument that rising input prices is a factor has merit. Maril Hazlett at the CEP blog had some comments on the subject last month:
...Careful of the disconnect. There’s been a lot in the news lately about the high prices of commodities like corn and wheat.
Unless I’ve missed it, though, I don’t think there’s been as much coverage of this fact: that while farmers are getting record prices for some crops, they are also paying record prices for diesel fuel, insecticides, etc. According to Liberal Online (Liberal, KS):
In some instances, diesel fuel has increased approximately 68 percent. Gas and propane are up nearly 54 percent. Fertilizer has jumped 99 percent and potash tops them all at 125 percent….
The ever increasing cost of fuel impacts the Thomas County producer’s bottom line. His farm has been in the family for four generations. While cropping inputs are increasing all the time, corn, wheat, milk and other commodities are trading at record highs, too. Wheat prices are up approximately 116 percent, corn is up 30 percent, soybeans 93 percent and milk 18 percent.
While these prices for crops have surged during the past year, they haven’t gone up as high as the prices for inputs necessary to run the farm.
While catching up on family this Easter weekend, I heard exactly this same story, but about extended family down in the Reno County area. Sure, they’re getting good prices for the crops - but they are getting killed on the inputs of fuel, fertilizer, etc. Apparently the cost of RoundUp has gone up by a factor of five. And while the commodity prices will probably fall sometime, those input prices typically don’t....
In today's MIT Technology Review article,
"Battling Ethanol-Propelled Food Prices" we read: