You’re paying 34 percent more this year for fuel and electricity than you were last year according to the USDA. Shelby Myers with the American Farm Bureau Federation says Indiana farmers are definitely feeling the squeeze.
“They’ve been facing these price increases all throughout the spring and they’ve been working to get what could be one of the most important crop years planted,” says Myers. “And for growers, they’ve expressed a lot of concerns about availability and delivery of the diesel fuel for when they needed it most, especially as we face some of these delayed planting times. So, that window to plant crops this year was smaller than usual, so it meant that fuel delivery had to be timely, but that also meant it came at a cost.”
Supplies of gas and diesel fuel traditionally go down during the summer as demand goes up, but Myers says there are additional factors this year.
“What’s making this even more difficult is that the U.S. does not have the same amount of additional supply being produced or even coming into the country that would supplement this increased demand,” according to Myers. “And so, we continue to see evidence where the U.S. economy is trying to play catch up, all those production slowdowns and interruptions that were created by COVID-19, and we’ve added in additional hurdles like Russia’s invasion into Ukraine, it’s really impeded the ability for the supply chain to catch up with demand.”
If fuel and energy prices continue to rise, she urges farmers to consider what options they may have to seek relief.
“It’s really about managing the risk to the price increases and that uncertainty of price increases and finding ways to reduce cost creatively. There are crop insurance products that are available that can help insure against input prices for farmers that would include diesel and fertilizer, but it’s really limited to a few states and only corn, soybeans, rice and wheat. But it’s also a really good opportunity to have conversations with local fuel retailers for the opportunity to price hedge and utilize on-farm fuel storage,” says Myers.
Click BELOW to hear C.J. Miller’s report on how Indiana farmers are feeling the stress of higher fuel and energy costs.