By DOUG GRAVES
Ohio Correspondent

WOOSTER, Ohio — Last week’s gas prices in Ohio averaged $3.80 per gallon. Not surprisingly, motorists in this state and others can expect those prices to escalate somewhat through the summer.

Driving to and from work each week can mean two tank fill-ups or more for those in the city.

But what about fuel prices on the farm? No one seems to recognize these fuel expenses on the farm, but the farmers themselves.

“I’m paying more attention to the number of passes I make in my fields,” said Ron Pullman, who grows 1,100 acres of corn and soybeans in Highland County. “If a trip across the field is unnecessary I don’t make it. It may not sound like a lot of saving, but every bit counts. Some passes in the field are needed, but even the slightest cuts help.”

Extension experts at Ohio State University have noticed more and more farmers making fuel cutbacks. Some even say that many farmers are turning to technologies like no-till and minimum tillage to reduce fuel consumption.
The extent of the rise in fuel costs will depend on a number of variables, such as the weather and the fate of already record-high grain prices.

And, these fuel costs will vary across agricultural sectors. Barry Ward, production business management leader with Ohio State University Extension, said that the effect of fuel and energy costs on grain farmers will be softened this year by the high profit potential expected for row crops in Ohio and the Midwest.

“Projected corn budgets for this year show the highest net profit outlook I have ever done in six years and safely you could say this is the highest net profit potential in recent history,” Ward said. “The high fuel prices we are seeing now are not going to significantly impact the bottom line of grain farmers this year. Of course, the outcome would have been very different in previous years had fuel prices risen to $4 a gallon then.”

According to Ward, farmers would have to spend about $10 more per acre to grow corn this year than last year (based on a $1 per gallon increase in diesel fuel and $0.75 per gallon of propane gas for drying grain.

Although prices are bad now, some experts say the effect on farmers will be hardest felt in 2012.

Carl Zulauf, an ag economist with Ohio State University, says many farmers already purchased their inputs for this year.

“The impact is more likely to be on the 2012 crop decisions,” Zulauf said.
But there’s the thought that farmers will feel the impact at this year’s harvest. Since the planting is later this year due to wet conditions there’s the potential for increased drying costs.

The good news for grain farmers is they’re likely to benefit from high commodity prices despite rising fuel expenses. Livestock producers may not have that luxury.

“One of the challenges dairy farmers face with fuel prices is that they are the last people on the list,” said Dianne Shoemaker, OSU Extension’s state dairy financial management specialist. “Everyone passes the extra costs (surcharges for milk hauling, feed delivery and more) down to them, but they can’t pass these costs along to anybody else. While fuel and oil costs are usually less than five percent of total direct expenses for dairy farmers, an increase in a year of slim margins has a definite impact on their bottom line.”

Beef cattle producers will be feeling the pinch as well. Clif Little, OSU Extension educator in southeastern Ohio, says fuel prices have impacted beef cattle and sheep farmers but warns the impact could be doubled with an increase on grain prices.

“Producers are waiting to see how this year’s weather might impact grain prices even more, considering the issues of flooding in the Midwest and the drought in Texas,” Little said.