Chad Hart. (ISU photo)
With gas prices rising, farmers are feeling the impact of inflation, as higher costs for fuel and fertilizer are shrinking profit margins for Iowa growers.
Chad Hart, an agriculture economics professor at Iowa State University, says while commodity prices are good, rising fuel prices can significantly increase production expenses. “It’s not only the cost to run the tractor across the fields to plant and harvest the grain,” Hart says, “there’s a lot of fuel used to move our farm products down the supply chain line.”
Hart says farmers also face challenges with price volatility, as fluctuating prices are making it harder to know when to buy and sell. Kelly Garrett, a farmer from Denison, says his planter tractors use at least 100 gallons of diesel fuel every day.
“It’s gone up $1.50 or $2 a gallon,” Garrett says, “so, there’s an extra couple hundred dollars a day to put your crop in just from a fuel standpoint.” Garrett says higher fuel prices means he’s also paying more for shipping. In the past year, he says he’s seen his shipping costs double. AAA-Iowa says the statewide average for gas is $3.91 a gallon. That’s 11-cents below the all-time Iowa high of $4.02 set in July of 2008. The current national average is a record $4.32.
(By Kendall Crawford, Iowa Public Radio)