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Electricity, diesel, fertilizer prices tough on farmers, ranchers
Mar 23, 11:38 AM EDT
By BETSY BLANEY
AP Agriculture Writer
http://hosted.ap.org/dynamic/stories/T/TX_AGR_COTTON_ENERGY_COSTS_TXOL-?SITE=TXSAE&SECTION=STATE&TEMPLATE=DEFAULT


LUBBOCK, Texas (AP) -- South Plains cotton producer Don Langston is eager for 
a "big rain."

Without it he'll have to keep irrigation pumps running to water thousands of 
acres of dusty, parched land so there's enough moisture to plant this year's 
crop in a couple of months.

He figures he'll spend as much as $50 more an acre than he did last year, 
when rainfall was plentiful, even by West Texas standards.

"We're going to have to have a good crop just to break even," Langston said. 
"I'm OK. Just need a big rain."

But for Langston and other agriculture producers across the U.S., electricity 
costs aren't the only concern. Diesel fuel and fertilizer prices are also 
weighing on them.

Last year, a farmer could buy a ton of fertilizer for about $450; the price 
tag is now closer to $1,000, American Farm Bureau Federation chief economist 
Bob Young said.

And when farmers and ranchers start up their machinery, their wallets will 
feel lighter.

Last year, 500 gallons of diesel cost between $500 and $800. This year it 
will cost about $1,500 to fill that same tank.

Most of the hikes in agriculture - as in other sectors - involve higher 
energy costs. Fertilizer is made from natural gas, for which prices have 
increased sharply.

"It's pretty difficult to figure out when it's going to stop," said Colorado 
City cotton producer Woody Anderson, a former chairman of the National Cotton 
Council. "Who knows when things are going to level off?"

Corn producers in West Texas also are feeling the pinch. Billy Bob Brown, who 
will grow corn and cotton near the town of Panhandle, 30 miles northeast of 
Amarillo, said it's going to cost him 46 percent more to plant 700 acres of 
corn.

Most of that is fertilizer, he said.

By his calculations he'll get $1.98 back for every dollar he puts into his 
corn crop. That's up from the $1.33 he made last year for every buck he spent.

"You can see we're not making quite as much money as people think," the 
69-year-old said. "The need for a risk management is extremely important 
because of our high inputs."

Langston said his electricity costs will go up again during the growing 
season as utility companies add a surcharge using pump engines' horsepower - 
during their peak usage months.

That's why early rain is critical.

"We could very well see a dry start which means producers will have to start 
watering from the time they plant, instead of having that bank of moisture," 
said Shawn Wade, spokesman for the Plains Cotton Growers, which serves 41 
counties on the South Plain, the world's largest contiguous growing patch.

Brown's emphasis on risk management includes weather that's typical in West 
Texas during spring.

"If a fellow were to catch a hail storm and lose a crop you'd have one heck 
of a financial loss," Brown said.

Portions of Texas, the nation's leading cotton producing state, have moved 
back into drought conditions, in part because of a La Nina weather pattern 
that brings warmer and drier weather patterns.

A two-year dry period in Texas ended in 2007, the seventh wettest year on 
record and 10 inches over the normal average rainfall. Lubbock is currently 
about .75 inches behind normal, compared to 2.5 inches above normal this time 
last year.

The state was expected to plant half (4.8 million acres) of the nation's 
forecast 9.5 million acres. Texas' tally is a drop of 2.3 percent from last 
year; the U.S. number is a 12 percent decrease from 2007.

Producers also are wondering whether they'll see a completed farm bill any 
time soon. The cotton industry is pushing for safety net similar to one in 
the bill that officially expired in the fall.

Congress voted to extend that to April 18, and there has been talk of 
extending it another year.

"That's the big question mark in all of our minds," Anderson said. "The 
uncertainty of not having a farm bill certainly adds to the anxiety."

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Betsy Blaney has been the AP's Lubbock correspondent since 2001 and regularly 
reports on agricultural issues.