Georgia farmers are facing fuel prices at least 50 percent higher
than last summer. If prices continue to rise, University of
Georgia experts say farm fuel costs could top $200 million this
year.

“Fuel and electricity have totaled less than 10 percent of farm
expenses in the past. But they constitute a sizable expenditure
for growers of crops,” said Bill Givan, a UGA Extension Service
economist.

“In 1998, Georgia farmers spent a little more than $124 million
for petroleum fuel and oil,” Givan said. “Electricity costs were
another $62.3 million.”

Fuel Costs Painfully High

The ’98 numbers are the most recent available, but Givan figures
fuel costs for ’99 were comparable. This year, though, they’re
far higher — painfully so for farmers.

“We estimate that 20 percent to 25 percent of the total energy
consumed on the farm supports animal production (primarily
broilers),” he said. “That means the other 75 percent to 80
percent of the fuel cost ($93 million to $99 million) is used to
grow the state’s 4.15 million acres of crops.”

At prices 50 percent higher, the fuel costs of producing Georgia
crops will climb by $62 million to $186 million. If prices keep
climbing, fuel costs could top $200 million.

Cotton will be most affected by the rising costs, due to the
large number of acres planted. Tobacco will be hit hardest on a
per-acre basis, due to the high cost of curing the leaves.

“We could see fuel costs double to $8.34 million for cotton,
$3.40 million for peanuts and $3.77 million for tobacco,” Givan
said.

Price Tag Raised $20 Million

In Georgia’s main crops (cotton, peanuts, tobacco, corn,
soybeans, hay and vegetables) alone, farmers’ fuel costs could be
$20 million higher.

“There are still more costs to be considered,” Givan said, “that
we haven’t measured in these figures. These costs include fuel
costs for drying crops, ginning cotton and harvesting
vegetables.”

Dry fields mean Georgia growers will have to use more irrigation.
That will use even more high-priced fuel.

A 1998 survey shows 1.4 million acres of Georgia farmland were
irrigated, using 12,833 systems. Of this number, 68 percent were
either diesel-, gasoline- or LP gas-powered. The others ran on
electricity.

“The most recent irrigation fuel cost estimate is $3 per
acre-inch using 1999 fuel prices,” Givan said. “The higher prices
increase that by at least $1.50 per (inch of water applied per
acre).”

If petroleum-based fuels power 68 percent of the irrigated land
(973,000 acres), then added costs of higher fuel prices would
equal $5.8 million for every 4 inches of water applied per acre.
That would be $11.7 million for the eight applications required
in a typical dry year.

“Agriculture is both a capital- and fuel-intensive industry,”
Givan said. “Fortunately, capital costs have been relatively low
in recent years — as have fuel prices.

“But the current fuel-price structure shows the industry’s
vulnerability to higher input costs,” he said. “That’s especially
true when these costs cannot be passed along.”

Expect the state’s farmers to look for ways to reduce the number
of trips across the field this year, Givan said.

“If 2000 is a dry year, as is being predicted,” he said, “then
we’ll see still higher production costs. That is, if irrigation
water is even available.”