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Farmers Face Higher Fuel Prices

Farmers Face Higher Fuel Prices
March 27, 2003 |

Consumers aren’t the only ones getting hit hard by soaring fuel prices. According to some Alabama farmers, prices for off-road diesel have gone up nearly 70 percent since this time last year, and because nitrogen used in fertilizer is a petroleum derivative, it’s also jumped in price.In early March, gasoline prices had increased nationwide for nearly 10 straight weeks to an average of $1.66 per gallon, up 54-cents from a year earlier. With farmers preparing their land for spring planting, the price jump couldn’t have come at a worse time.”This time last year, I was paying an average of 75-cents per gallon for (off-road) diesel, and now it’s costing me $1.25 per gallon,” said Dale County farmer Chris Thompson, who grows peanuts, cotton and corn on his 4,000-acre farm.Alabama Farmers Federation President Jerry Newby has asked Alabama Commissioner of Agriculture Ron Sparks to investigate the skyrocketing fuel prices.”Unlike a lot of businesses, farmers can’t pass along their increased costs of production,” Newby said. “When you experience an increase of this magnitude for one of your major input items, it will seriously affect your ability to make a profit or even stay in business.”Sparks said his office is investigating the price increases to make sure they are justified. “It is an unfortunate situation for everyone,” he said. “We have not found any cases in Alabama of a merchant taking advantage of farmers or consumers. Prices are generally the same across the state without one particular dealer or area charging more than others.”One of the coldest winters in recent years also caused increased consumption for greenhouses and poultry farmers. That, coupled with higher prices, is cutting into to their already slim profits.According to the U.S. Department of Energy, crude oil prices were $21.29 a barrel a year ago; in March they were up to $35.05. Likewise, natural gas that averaged $2.22 per thousand cubic feet a year ago was $6.30 in March. Several factors contributed to the increase, according to experts. A colder than expected winter, the loss of Venezuela’s production and worries about war with Iraq all complicated the situation.

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