Gas prices are going up. Consumers feel it at the pump, and
farmers may begin to feel
it in the field.

"This is the time of year when farmers use the most
fuel," said William
Givan, a University of Georgia Extension Service economist for
farm management.

"During land preparation, farmers see their tractors
burn 50 to 60 gallons of
diesel fuel per day," Givan said.

But even at that rate the effect of high gas prices could be
nominal.

"Most farmers bought their gas before the prices ran
up," Givan said.
"And, even at $1 per gallon for diesel, it is a very small
percentage of the cost of
growing a crop."

The problem has gotten the attention of Congress, as they are
working to repeal the
4-cent gas tax. But for most farmers the governmental moves are
symbolic.

"On-farm diesel fuel is exempt from the road tax
anyway," Givan said.
"The president released some of the national reserve, but
it was only about a day’s
supply."

The real test, Givan said, is how long the prices stay high.

"So many things farmers use have petroleum bases or are
carried to the farm by a
truck. If the prices stay up," he said, "it will run
up the cost of doing
business. If fuel prices stay up, it will trickle through to
everything that is
petroleum-based or is moved by a truck."

For consumers, farm-product prices may go up, but not because
the farmers’ costs are
higher.

"Prices rise based on what suppliers can pass
along," Givan said.
"Unfortunately for the farmer, he can’t usually pass along
his higher costs."

Farmers recoup their costs based on a rise in demand or a dip
in their products’
supply, or both.

Right now, corn growers are seeing a huge price increase,
thanks to high demand and low
corn supplies.

"It actually happened with our two major grain crops,
corn and wheat, in the past
two months," Givan said. "The wheat crop is expected
to be way off, and the corn
crop is expected to be off here and in other countries.

"There will be an increase in demand," he said,
"especially from some
Third World countries. That has run up the price."

In the United States, corn is up to more than $5 per bushel.
That’s good news for grain
growers, but bad news for livestock farmers.

"It raised the price to the point that some people will
stop feeding corn to their
livestock," Givan said. "They don’t have anything to
substitute for the
high-priced grain, so they have to buy it and feed it. But in
the long run they can cut
back on the number of animals they feed."

Along with gas and grains, fertilizer prices jumped 15
percent to 20 percent over last
year’s prices.

"There’s not much a farmer can do about that,"
Givan said. "They have to
have fertilizer."

Fertilizer prices have been fairly stable over the past few
years, even though a lot of
suppliers have been going out of business.

"Before, there was a glut in the market, and many
fertilizer suppliers were losing
money," Givan said. "The drop in supply brought the
supply and demand into line,
and prices went up."