Fuel and electricity prices are on the rise again amid declining farm income. Unleaded gasoline averaged $3.54 a gallon nationally last week, up 14 percent from the start of the year. Diesel averaged $4.
American Farm Bureau Economist Betty Resnick says that’s taking a toll on producers nearing planting season. She says, “It does take a lot of fuel to do what we need to do. You also have things like the cost of electricity. That also impacts farmers a lot for their grain dryers, or if you’re a high-energy cost production, like poultry production.”
Electricity costs were also rising. Resnick says, “Across the entire Midwest, electricity prices are up 5-and-a-half percent, year-over-year. And, in the Upper Midwest, that was even higher in Minnesota and the Chicago area.”
Wars overseas, OPEC production cuts, and U.S. refinery disruptions are blamed for higher gas and oil prices, with oil at a six-month high last week on fears of an Israel/Iran conflict. All this as AFB’s Resnick cites declining farm income; “We are projected to have lower incomes, both year-over-year from last year, and it was also a decrease from the year before, so two years of declines in income.”
USDA forecasts about a 25 percent drop in net farm income this year. Resnick says a positive note is declining natural gas prices, keeping ammonia and, thus, fertilizer prices, in check. Another is USDA REAP grants and loans to buy renewable or energy-saving systems.
Story by NAFB News Service and Matt Kaye/Berns Bureau Washington
