Iowa Public Television


Gas Prices High as Farmers Get Ready to Plant

posted on April 2, 2004

Four years ago, presidential candidate George W. Bush pledged a get-tough approach to OPEC that would force the oil cartel to back off its threats to cut production. Those cuts, of course, put upward pressure on oil prices.

This week, as OPEC again threatened to tighten the oil spigot, the White House could only pledge to "stay in close contact" with oil-producing nations to make its concerns known.

Congress, too, has little leverage. The massive energy bill it's repeatedly failed to approve does nothing to boost refining capacity or reduce oil imports.

Against that backdrop, urban and rural consumers alike are struggling to adjust to sharply rising fuel prices.

Gas Prices High as Farmers Get Ready to Plant Gas prices continue to soar across the nation causing people everywhere to pay more at the pumps. According to the Lundberg survey, the nationwide gas price average in the past two weeks has been $1.80 a gallon for all grades, hitting a new record high. And, experts say high prices could top 2 dollars per gallon during the peak summer travel season.

Those most affected include farmers who are getting ready to go to the fields and plant. Many are paying diesel prices that are up 30 cents or more per gallon over last year. Petroleum products go into nearly every aspect of modern farming, from diesel fuel in tractors to chemicals and fertilizers used in the fields. And farmers, unlike other businessmen, can't pass on the increases. However, there are ways they can minimize the overhead.

Mike Duffy, Farm Economics Manager, ISU - The biggest thing that farmers can do is make sure their power units are tuned up and running as efficiently as possible. Long-term, they need to do things we've recommended all along, watching fertilizer use, making sure they're only fertilizing at levels they can utilize, and that their pesticide programs are a sound base.

OPEC which pumps about a third of the world's oil, announced Wednesday that it will reduce its output target by 1 million barrels per day. The reduced production, combined with strong global demand, is pushing fuel prices higher. That's a trend many analysts say will continue.

Mike Duffy, Farm Economics Manager, ISU - We need to be aware that we are in an era that ups and downs in fossil fuel prices are going to be the rule, not the exception. And, we have to be prepared for them to jump fairly significantly as we've seen in the past few years. The days of the lower energy crisis are over and this wide fluctuation, we're going to have to get used to.

Tags: agriculture crops farmers markets news oil