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Local agriculture: A balancing act
Commodity prices are rising, but so are costs
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H&N
photo by Andrew Mariman |
By
DD Bixby
H&N Staff Writer
Agriculture
commodity prices are at record highs, but when it takes $400 to $500 to
fill a tractor gas tank, it keeps things in perspective, says
He will get better prices for his crops this year, but any hike in
profit margin will likely be eaten by increased costs.
Seed and fuel costs — which include fertilizer and chemicals along
with tank prices — are up, he said, estimating that cost of doing
business this year may be nearly double what it was last year.
Higher prices are partly caused by increasing global competition for
commodities. In addition, corn planted for ethanol is driving up demand
for other sources of food, in turn, raising prices, according to Klamath
Basin Research and
With
high prices, it’s easy to believe farmers will be getting rich while
the national economy seems to be slipping, he said.
“It’s going to be a strong market. The potential is there to make
some money,” Riggs said.
But the key is to look at the margin of return, he said, which won’t
be available until after fall harvests. It comes down to management of
the land, which varies from acre to acre, Riggs said.
“The people who know how to manage their land are going to manage it
to their potential,” he said.
Noonan said farmers are trying to decrease their fuel costs without
reducing harvest yields. He tries to make fewer tractor passes on a
field by using no-till drilling and pulling multiple implements at the
same time.
According to TJ Woodley, district manager of the Klamath Soil and Water
Conservation District, no-till drilling saves between $1,600 and $4,800
on 100-acre planting costs, or about $16 to $48 per acre, depending on
farm practices.
But farmers can only cut so many corners before they cut into their
crops.
Malin farmer Bill Walker said he doesn’t cut back on fertilizer
because the farm loses crop yields. He pre-bought chemicals and
fertilizers for the year and expects to use all of it.
 |
| Jose
Mendez and Hector Alvarez link irrigation pipe on a field
planted with barley Thursday north of |
Both
Noonan and Walker contracted some of their crops, ensuring a price at
harvest.
Noonan said he does it where it makes sense for the operation.
At this time of year, Walker generally expects about 50 to 60 percent of
the grain contracts to be sold, but record sale prices for wheat have
his grain contractors dabbling in futures markets.
Rising feed costs
Klamath Basin Research and
Gary Fensler of the Modoc County Agriculture Department said a big
concern with the high prices is if the bottom falls out, producers will
be left with high-cost investments and no returns.
The agriculture economy, said Harry Carlson, director of
“I guess the two-edged sword is that prices have been pretty good for
commodities, but probably balanced with increasing production costs of
fuel and fertilizer and such,” he said.
Farmers just don’t know yet whether current prices will be sufficient
to cover their costs.
“I think there’s some increased opportunity,” Noonan said.
“Things look good, but the jury’s out. We’ve gotta wait and see
what the fall brings.”
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Source: http://www.heraldandnews.com/articles/2008/05/02/featured_story/