Farmers, ranchers, and agri-businesses feeling effect of high costs

By LYNN MONTGOMERY | East Texas Edition

April 1, 2004 -- As fuel prices continue to rise, many avenues of the everyday lifestyle will be affected.

Farmers and ranchers are already feeling the effects as planting season and calving season are under way.

"I haven't gotten any feedback from the farmers, but I know it has to be hurting them, because it's killing me," said Fannin County Extension Agent Ricky Maxwell.

Maxwell explained he is driving 30 miles, every day, to check bred heifers. "Those miles add up."

Gas prices are causing some companies like M-G Inc., a farm service center, in Weimer to raise wholesale prices. "We tried a fuel surcharge but the customers wanted it built into their cost," said Bobby Wick.

M-G Inc. also has a poultry distribution center which caters to fast food and buffet-type restaurants.

"We have had to cut down on some of the trips (to the restaurants) and consolidated in some areas. Because of the fuel cost, prices are going up on the menus the restaurant," Wick added.

Affects of rising fuel costs are also being felt at Producer's Cooperative in Bryan.

"Farmers are only buying in small amounts (of diesel fuel). Instead of filling up their tanks, we are only putting in a third to a half tank; (then) we have to go back in two or three weeks, which is costing the farmer more," said Preston Ruffino, petroleum manager at Producer's.

Other avenues that farmers will see a rise in cost is fertilizer.

"Fertilizer is high because the East Coast used so much natural gas during the hard winter," commented Dan Kelley of Kelley Farms Agri in Bogata.

But the demand for fertilizer remains consistant with the season.

Kelley cited his company, this year, is offering an organic-based product for farmers and ranchers. The product is dried molasses which is used to feed the soil microorganisms. Dried molasses provides sulfur, potash, and trace minerals to the soil.

Kelley learned about dried molasses after listening to "Dirt Doctor Howard Garrett" on WBAP radio.

On Garrett's website, he explains dried molasses as an organic by-product, where rice hulls are covered with liquid molasses. "The combination of the two materials is very powerful. Stimulation of soil microbes and related plant growth is impressive. You see results on large acreage with application rates as low as 50 pounds per acre. If the budget allows, it's better to use more -- 400 pounds per acre or 10 pounds per 1,000 square feet."

Extension Economist Dr. David Anderson recently took today's increased fuel cost and applied it to a wheat farmer's budget.

"Over 30 percent of the budget is fuel or fuel-related, which includes fertilizer, custom harvesting and driving the equipment (trucks and tractors). That's a significant part of the cost," Anderson said.

What can producers do?

According to Texas Cooperative Extension, it comes down to a management decision.

One decision, according to Anderson, is to figure out the optimal time to apply fertilize crops.

With many farmers using the no-till practice, which cuts down on the number of times they go over the field, Anderson added "they are using more Round-up (to combat weeds) which is an expense."

For now, it is a wait-and-see situation as to when a decrease in fuel prices will occur. If fuel costs continue on the upswing, energy experts say it could hurt fuel-dependent industries such as airlines and trucking which means higher prices at the grocery store, and don't forget vacation season is fast approaching.