Farmers' fuel costs risingFarmers' fuel costs rising
Just as farmers are getting to the point where they can make a decent living from food prices, another issue has come into play. Input costs have risen so rapidly and so dramatically that it’s unlikely many of our farmers can continue to make a decent living.
March 28, 2011
For many years commodity and food prices have been so low it’s been hard for American farmers to make a profit and consequently a decent living for their families.
Like any business, no profit means farmers will go out of business, forcing food production overseas.
None of us wants food production to go the way of oil. Today, we must rely on often-unfriendly countries to supply much of our energy needs. We see the consequences of that situation at the gas pump as just the potential for tightened supply causes prices to soar.
The U.S. has about an 11-day food supply within our massive food chain. One can only imagine the consequences if we allowed China and Brazil to grow our food and they decide for political reasons to no longer send us that food.
Right now, commodity and food prices have risen. Many farmers could make a decent living based on the actual price received for the food they produce. Prices for Georgia cotton, pecans and peanuts are at or near a record high. Even Georgia peaches are likely to fetch record prices this summer.
But, just as our farmers are getting to the point where they can make a decent living from food prices, another issue has come into play. Input costs have risen so rapidly and so dramatically that it’s unlikely many of our farmers can continue to make a decent living.
Instability in the energy market affects more than the price of gas for our cars.
The price of fuel to plow fields, nitrogen to fertilize crops and grain to feed livestock has increased at alarming rates over the past year. There seems to be no end in sight to the increases of these vital agricultural inputs.
In particular, Georgia’s poultry industry, the largest poultry industry in the U.S., is having an increasingly difficult time as the cost of feed, primarily corn, skyrockets.
High food and commodity prices have given some farmers a chance to finally rely less on government-support programs. Yet, with increased costs, these programs will have to be re-instated to keep our farmers in business and food production growing in the U.S.
The only real and long-lasting solution is to reduce inputs used in traditional agriculture. We need to find ways to reduce fertilizers, pesticides and water (since it requires fuel to pump ground water) used to grow crops. The cost of feed and medicine to keep our animals healthy also needs to be reduced.
Who will do the research?
Who will conduct the necessary research to find ways to reduce inputs needed to grow our food? Private industry has no economic incentive to reduce input costs, because it will deflate their bottom line. It is difficult to imagine a fertilizer company sponsoring research to reduce the reliance of our farmers on the very product the company sells.
It’s equally difficult to see the federal government, which supports competitive research to solve problems, willingly address some of these real-world issues. Federally funded research tends to focus on high-minded, long-term societal needs. This is certainly important and needed research, yet it doesn’t broadly address today’s agricultural problems.
It’s unlikely that federally sponsored research will help our farmers adjust to the new reality of extremely high input costs, at least in the short-term. And, the short-term is going to determine who remains in business.
Research to reduce input costs for food production falls squarely on our nation’s land-grant university system. The University of Georgia and Fort Valley State University are two of the premier land-grant universities in the country with a direct mandate to help our farmers stay in business and produce food for Georgia, the nation and the world.
The land-grant system in Georgia is fully capable of providing needed research to help reduce our farmers’ input costs. We can translate and transfer that information through Cooperative Extension to farming communities when and where it’s most needed. Supporting the land-grant mission of the University of Georgia and Fort Valley State University is more important now than ever.
As the world cries out for more food, we need to double world food production by the year 2050. Agriculture is Georgia’s largest industry with a strong infrastructure that is setting us well on the way to becoming the breadbasket of the world.
It is clear Georgia will play a major role in feeding the world.
With a deepened Port of Savannah and a widened Panama Canal, we are ideally situated to grow the food and reap the economic benefits this great industry can provide. However, we will only compete and be successful if we remain on the cutting edge of research, training of the next generation of students and transferring that information to the farming communities who implement these new practices.
(J. Scott Angle is dean and director of the University of Georgia College of Agricultural and Environmental Sciences.)
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