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- From: Aozotorp AT aol.com
- To: market-farming AT franklin.oit.unc.edu
- Subject: Farmers group sees seeds of disaster
- Date: Wed, 14 Feb 2001 10:39:21 EST
http://www.denverpost.com/business/biz0214a.htm
Farmers group sees seeds of disaster
By Steve Raabe
Denver Post Business Writer
Feb. 14, 2001 - Colorado's farmers and others across the nation face a
catastrophic drop in income because of soaring energy and fertilizer prices,
an agriculture group said Tuesday.
Already beset with low crop prices, farmers could face an additional decline
of 20 percent in net farm income over the next two years without an emergency
infusion of federal aid, according to the Food and Agricultural Policy
Research Institute at the University of Missouri.
The policy group said in a report to Congress that farmers may be hit with an
income loss of $9 billion by 2003 before commodity prices are expected to
rise, helping turn around the farm sector.
"I'm very concerned," said vegetable grower Bob Sakata, president of
Brightonbased Sakata Farms. "Our cash flow was way off last year because of
energy costs, and this year we'll be hit with a double whammy because of
higher fertilizer costs."
Natural gas is used in the manufacture of nitrogen-based fertilizer. Many
Colorado farmers also use natural gas to fuel irrigation pumps that supply
center-pivot sprinklers.
"There's no question that given the higher input costs and lower commodity
prices, I will lose money this year," said Steve Scott of Scott Farm
Enterprises in Burlington, a grower of wheat, corn and beans.
Scott said his cost for anhydrous ammonia, a common farm fertilizer, has
risen to $425 a ton this year from $255 a ton last year.
Speakers at the Colorado Agricultural Outlook Forum held Tuesday in Denver
said it is probable that Congress will include more emergency aid in a
current farm bill.
"Congress will address the issue," said Barry Flinchbaugh, chairman of the
Commission on 21st Century Production Agriculture and a farm economist at
Kansas State University.
"Clearly the cloud on the horizon is energy costs," said Flinchbaugh, a
keynote speaker at the agriculture forum. "The average farmer cannot absorb
these higher costs."
Colorado Agriculture Commissioner Don Ament said his discussions with the
state's farmers show that energy and fertilizer costs are a big concern.
"Nobody anticipated the types of increases we've seen in natural gas prices
on top of low crop prices," Ament said. "You don't have to be too much of a
dreamer to put all this together and see that it spells trouble."
Farmers received $8 billion in emergency aid last year. Congress will begin
hearings this month on a long-term overhaul of farm policy that includes
proposals for a new system for subsidizing growers when crop income is down.
The report released Tuesday estimates that net farm income will drop from
$45.4 billion last year to $39.6 billion in 2001 and $36.3 billion in 2002
before starting to turn around in the following years as commodity prices
rise.
Farm income peaked at $55 billion in 1996.
Government payments have been soaring since then, topping $22 billion last
year - triple what they were in 1996.
The cost of fuel that farmers need for tractors, combines and ir rigation
equipment jumped 31 percent last year, according to the report.
Prices may drop slightly in coming months, but growers are expected to be hit
this year with a 33 percent cost increase for fertilizer, the congressionally
funded institute reported.
Meanwhile, the price of corn has averaged less than $2 a bushel without a
significant increase for several years.
Cattle producers are in the best shape, in part because of rising beef
consumption and the low grain prices, which result in lower feed costs.
The Associated Press contributed to this report.
-
Farmers group sees seeds of disaster,
Aozotorp, 02/14/2001
- <Possible follow-up(s)>
- Re: Farmers group sees seeds of disaster, Jill Taylor Bussiere, 02/14/2001
- Re: Farmers group sees seeds of disaster, Del Williams, 02/15/2001
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