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Fuel costs worsen weather woes

Having just taken my car for the second of its twice-yearly washings ("What, you mean this is really a WHITE car - I thought it was brown."), the encrusted layers of dirt and grime were yet another reminder of just how scarce rain has been this year.

For each of the past three or four years, in letters and e-mails to friends all over creation, I've lamented that "this has been the driest summer in the 25-plus years I've lived in the Mississippi Delta." But 2000 took the cake. I'm probably going to have to post warning signs on my concrete driveway, which has buckled and cracked to pieces with the drying and shrinking of the underlying gumbo clay soil (knock on wood, thus far my house foundation hasn't done likewise - as has happened to a number of others around town).

This year's scorching temperatures and scant rainfall have resulted in harvests ranging from absolutely awful on dryland to reasonably good, but nothing outstanding, on irrigated acres. The ongoing multi-year rainfall deficit has steepened the ongoing draw-down of the subsurface aquifer and dramatically slowed its already-behind-the-curve recharge.

Even so, this ultra-dry, ultra-hot year and the continuing cycle of in-the-cellar commodity prices have demonstrated anew the value - almost necessity - of irrigation as a management/insurance tool in the lower portions of the Mid-South states. It's hard enough to make a profit without irrigation in a "normal" year; in a year like this, it's like Russian roulette.

Adding insult to injury, in a season when profit potential has been as hard to pin down as a summer dust devil, skyrocketing increases in fuel costs made production costs all the more burdensome. Every trip across the field, every hour's running of the irrigation pumps took 20 to 30 percent more fuel dollars than a year ago.

Barring some miracle to significantly reduce fuel prices, higher costs may spread all across the inputs/production ledger next season. And it's not all crude oil/diesel/gasoline-related; those who use natural gas, whether in their homes or on their farms, have seen prices go from $2 per thousand cubic feet last year to almost $5 now, and they may go even higher. Home heating costs this winter, particularly with a return to "normal" cold temps, are likely to be staggering.

Since natural gas is the feedstock for nitrogen production, the escalation in prices is having an impact in the fertilizer arena. At the recent World Fertilizer Conference at San Francisco, industry leaders were lamenting that with natural gas futures topping $5 at one point, pressure on U.S. manufacturers will intensify.

In yet another touch of irony, as U.S. natural gas prices have zoomed upward, world prices for urea have collapsed, resulting in fierce competition for sales in a very thin market. A number of U.S. manufacturers have had production facilities idled for months ("With $5 gas, there's no way to make money," one company official said), and others are expected to follow suit, opting instead to import urea supplies from the Middle East and other countries where production costs are lower.

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