Farmers faced with low commodity prices, high input costs and variable weather can expect one bright spot in 2016: lower energy prices.
Everything from propane and diesel fuel to fertilizer and electricity should be more affordable this year, a fact that makes Russell County poultry farmer Greg Edwards smile.
“The high propane prices a couple years ago weren’t something we were expecting,” said Edwards, a State Poultry Committee member for the Alabama Farmers Federation (AFF). Edwards said he was fortunate to have locked propane contracts before the propane crisis. “The prices we’re paying now coupled with a mild winter will help chicken growers make up what we lost the last couple of years. Right now, I’m paying the lowest price I’ve ever paid for propane in nine years of doing business.”
Poultry producers and other farmers also could benefit from lower electricity costs.
Alabama Public Service Commission (PSC) President Twinkle Cavanaugh said the PSC’s decision to cut electricity rates for Alabama Power customers by 2 percent is an example of good government.
“We are fortunate in Alabama that Alabama Power and its customers have realized significant savings from the use of low-cost electricity produced by hydroelectric, coal and natural gas,” she said. “At a time when every penny counts, we are pleased that all farmers should see some relief in electricity costs.”
Dallas County catfish and tilapia farmer Travis Wilson said he hasn’t crunched the numbers, but any talk of rate decreases is welcome.
“The fact they’re not increasing rates is always beneficial,” said Wilson, who takes advantage of a special, off-peak rate for farmers. “We’re very fortunate to have the relationship with Alabama Power that we have.”
Perhaps the most noticeable energy savings, however, is at the fuel pump. While commuters may save $20 a fillup, the drop in gasoline and diesel prices could mean thousands of dollars in savings for Alabama farmers during planting season.
“Every trip across the field is an investment in the crop,” said Carla Hornady, AFF’s Cotton, Soybeans and Wheat & Feed Grains divisions director. “Lower fuel costs increase the potential for farmers to have a successful season.”
With crude oil at its lowest price since 2004, costs of petroleum-based products like fertilizer are also declining for farmers. Researchers at the University of Illinois estimate fertilizer prices will drop to lows not seen since 2009, something Cherokee County row cropper Nick McMichen said will equate to fewer sleepless nights on his farm.
“Lower fertilizer and transportation costs are going to make things a lot better,” he said. “I anticipate a 5-percent savings, maybe even 10 percent. As tight as budgets are, we’re looking to cut costs, and there isn’t much to cut. This is going to give us some extra breathing room.”