Media Releases, Legislative News, Agricultural Updates
By John Stencel
Reimbursable mileage rates have already gone up, surcharges are appearing on everything affected by rising energy costs, and the public is bracing for increased heating bills. Skyrocketing fuel costs are burdening most everyone, but agricultural producers are possibly the hardest hit.
Consumers have the option of carpooling to jobs or turning down their thermostats a few degrees to mitigate the rising costs of energy, but farmers have little flexibility. When it is time to harvest crops, ripe grain will not wait. If their livestock herds and flocks give birth during a cold snap, they have no choice but to keep them warm enough to survive. And, perhaps, most difficult of all, farmers and ranchers cannot put a surcharge on their products. They must take the price dictated by the market.
Lower 2005 commodity prices, coupled with rising energy prices, could spell disaster for the nation’s family farmers and ranchers.
A U.S. Department of Agriculture study showed that in 2004, the cost of chemicals, fertilizers and fuels comprised over 13 percent of the producer’s input costs. More recent statistics indicate that producers experienced a 24 percent increase in the cost of fuel and a 12 percent increase in the cost of fertilizers and pesticides for the first six months of 2005. More recently, since Hurricane Katrina and Rita have wrought their destruction, fuel costs and natural gas prices are 50-75% higher than one year earlier. In addition, other suppliers, such as veterinary services, the feed mill, and so on, will certainly be raising their prices to cover the added expense of higher fuel prices.
A third whammy that could still impact production agriculture is the threat of cuts to the federal farm program budget. The added hardships facing farmers and ranchers affected by Hurricane Katrina has resulted in at least a temporary stay of execution in this arena. Rocky Mountain Farmers Union is calling upon Congress to convene hearings or create some sort of vehicle to ensure that neither price fixing nor price gouging is occurring.
We commend President George W. Bush for his decision to open the Strategic Petroleum Reserve and urge him to continue to act decisively to resolve this energy crisis. We also commend the U.S. Congress for the disaster assistance aid package that will go to producers affected by recent hurricanes as well as other weather-related disasters.
These stopgap measures will only slow the impact of rising fuel prices on producers and consumers. We as a nation must agree on a comprehensive, long-term approach to supplying U.S. energy needs for years to come. The recent energy bill passed by Congress was a good first step, but we must significantly reduce our use of fossil fuels, particularly imported oil if we are to maintain our economy and way of life. And, we cannot abandon our plan if energy prices drop to 2004 levels. We must look to more renewable energy to lessen our dependence on foreign oil.
If we fail to get serious about our energy problem, our next shortage could be a shortage of food. As much as Americans like their private cars, I think most would rather jump on the public bus or carpool to work than to have no food in their pantries or fridges.
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