Alabama farmers are spending more to plant their crops this year as soaring diesel fuel and fertilizer prices cut into already thin profit margins.Calhoun County farmer Johnny Bryant said fertilizer prices already are about 30 percent higher than they were in 2003, and there’s no guarantee they won’t go even higher as summer approaches.”The biggest part of it is up anywhere from $28 a ton (for liquid nitrogen) to $60 a ton for the ammonium nitrate that we put on our pastures back early in February,” Bryant said. “They’ve told us not to bank on any specific price because it’s going to be a day-to-day thing. The price you got today is not going to be good tomorrow.”In north Alabama, Lawrence County farmer Don Glenn has seen the cost of liquid nitrogen (32 percent N-SOL) jump from $128 per ton in 2003 to $167.50 a ton this year. He also paid about 10 cents more per gallon for diesel fuel when he filled his tanks in February, but Bryant said prices have climbed another 10-20 cents a gallon since then.”Last year, when we started our crop, I think we were paying 92 cents a gallon for off-the-road fuel. One day last week, they brought us a load fuel at $1.28 a gallon,” said Bryant during an April 1 interview. “It’s a lot of difference when you are burning eight to 10 gallons an hour in a machine. That’s a lot of money per hour. It’s just going to make it bad for everybody. The consumer is going to have to pay for it down the road.”Although commodity prices have rebounded somewhat from their historic lows of the past few years, Bryant fears increasing production costs could force some farmers out of business. “Commodity prices are going to have to go up a whole lot or we can’t stay in business,” he said. “I mean, you can lose money a little bit here, but you’ve got to have it somewhere.”It’s going to be a disaster if the prices don’t get in line,” Bryant added. “If the fuel prices and input prices go up 28-30 percent–and it looks like it’s going to be in that range–where we’ve been getting $2.30 or $2.40 a bushel for corn, it’s going to have to be above $3 just to offset that loss. It’s just not a good situation for agriculture with these fuel prices we’ve got now.”The effect of rising energy costs on producers, however, is not limited to higher fuel and fertilizer prices. Madison County farmer Dennis Bragg said farm chemicals and supplies also cost more this year.”I bought irrigation pipe the other day, and it was way more expensive than what I’ve been paying,” Bragg said. “It costs the manufacturer more to make the plastic and to transport it, and it all gets passed down to the guy on the bottom. But we don’t have anybody to pass it on to.”Instead, farmers are looking for new ways to squeeze even more efficiency out of their already tight operating budgets. Macon County farmer Shep Morris is among an increasing number of Alabama farmers using poultry litter as a nitrogen source for their crops.”The poultry litter is costing–by the time we get it spread–about $20 per ton, and it contains about $40 per ton worth of N, P and K (nitrogen, phosphorous and potassium),” Morris said. “It’s a little more trouble to use, but it’s a good value, and it adds organic matter to the soil.”Morris has every batch of poultry litter he applies tested at Auburn University because the nutrient value varies among loads. He’s also required to have a nutrient management plan, and the litter must be stored in an environmentally sound manner until it can be applied.”The nitrogen in the litter is slow release, so we still have to use some additional commercial fertilizer. But it’s a good resource that we have here in the state, and we need to learn how to use it,” Morris said.Calhoun County Farmers Federation President Marshall Prickett had good results using poultry litter as a source of nitrogen.”Last year we used all litter, and we made over 600 bales of cotton on a little less than 300 acres. I think we ran about 1,200 pounds of lint cotton per acre, and you can’t do any better than that in this area,” Prickett said.Because Alabama’s thriving poultry industry generates an abundance of litter–especially in north Alabama–the U.S. Department of Agriculture has implemented a cost-share program to help farmers offset transportation costs. The Alabama Litter Distribution Project is funded through the Environmental Quality Incentives Program (EQIP). Producers interested in the project may call the Poultry Hotline at 1-866-548-8123.Growing Their FuelBurning biodiesel fuel in tractors and farm machinery is another way Alabama farmers can hedge their fuel costs. Don and Brian Glenn started using biodiesel last year, and they’ve been pleased with the results.”You don’t lose any performance, if anything, it’s better,” said Brian Glenn. “There’s more natural lubricant in the biodiesel, and it contains a solvent that cleans up dirty fuel systems. There’s less soot, so you don’t get that eye-burning sensation you get from a typical diesel engine. It’s better for the equipment; it’s better for the engine; and it’s better for the environment.”For the Glenns, however, the best thing about biodiesel is that it’s made from soybeans.”It costs roughly 1 cent more per gallon, per percent of biodiesel blend, but if everybody burned biodiesel, it would probably mean $1 per bushel on the price of soybeans,” said Don Glenn.Bragg said it’s like “spending a penny to make a dollar.””For every $1-per-bushel rise in soybean prices on a 1,000-acre farm, a farmer will make $40,000, if he’s making 40 bushels per acre,” Bragg said. “He’s going to burn nine gallons of fuel per acre. That’s 9,000 gallons. If he uses a B-10 blend, that’s 900 gallons of biodiesel at $2 a gallon. So, he’s spending about $1,800 to make $40,000.”Bragg is working with Madison County Extension Agent Mark Hall to gauge the benefits of using biodiesel. Hall received a grant from the Alabama Department of Economic and Community Affairs that allows him to provide biodiesel to 16 north Alabama farmers to demonstrate its viability as a farm fuel source. He also received a grant from the Alabama Soybean Commission to promote biodiesel use in local government fleet vehicles.Hall said a 20-percent biodiesel blend can be used in farm machinery without any engine modifications. Each year, Alabama farmers use more than 12 million gallons of diesel fuel. Since a bushel of soybeans will yield about 1.5 gallons of biodiesel, consumption of soybeans could increase by 1.6 million bushels per year, if all farmers used a 20 percent biodiesel blend.
Fuel, Fertilizer Prices Increase Planting Costs