100% diesel increases and shortages deny U.S. farmers their ‘life blood’

Farmers from Iowa to Ukraine are grappling with rising diesel prices and volatile supplies, forcing them to spend unprecedented amounts on fuel in a chaotic market and raising concerns about the fall crop.

In the United States, where maize and soybean growers are rushing to plant with delays after rains and cold temperatures, it now costs some farmers ভর্তি 1,000 a day to fill a tractor tank, twice as much as a year ago. And the most intense part of the farming season has not yet arrived.

Iowa farmer Chris Easington, president of the National Corn Growers Association, said, “We have not seen such a rise in the price of farm diesel fuel.” Cost per gallon has risen to $ 4.70 from $ 2.20 a year ago, he said.

In the bread-basket country of Ukraine, three months after the Russian military invasion, farmers are plowing fields amid a brutal bombing of deposits. A grain farmer said he had enough fuel for two months. He is concerned about the supply of diesel ordered a few weeks ago which has not yet arrived.

“If you had to wait so long each time, you’d be out of breath,” said Kiss Huizinga, who cultivates 15,000 hectares (36,000 acres) in Ukraine. Crops needed to feed dairy cows are still a few days away from harvesting and if the delay continues, autumn can be a big problem for maize and sunflowers.

The supply of diesel to the United States is low, especially on the east coast, amid shrinking grain stocks and continued inflation. Many farmers in the U.S. are still in a good position for another year of profit as war and global weather problems have prolonged the 2021 crop price rally. Wheat has recently risen to an all-time high and corn and soybeans are trading near record highs. Still, prices of diesel and other major agricultural essentials are expected to fall as prices rise.

U.S. diesel prices are at an all-time high, with deficit warnings, especially in the eastern United States. Russia’s aggression in Ukraine has reduced global energy supplies. Although the situation in the Midwest is not so bad, the wholesale price in Chicago is still 75% higher than a year ago.

“Diesel is the lifeblood of agriculture,” said Iowa corn and soybean grower Ben Rinshe, whose fuel costs have risen from $ 35 to $ 70 per acre. Fertilizer, grain and machinery parts cannot be transported efficiently through the system without diesel, which is also required for its huge earthmaving equipment.

In fact, diesel is just a fuel problem. Propane has almost doubled compared to last year. It is used to heat farmers’ homes and power dryers during harvest to reduce the moisture content of maize and make the crop suitable for storage and sale.

This is likely to be a source of concern for farmers in the North American states and in the Canadian prairies, who are facing heavy rains and floods this season. Rising petrol prices at the pump may also increase during the summer driving season. Related: Every state in the United States has more than ড 1 per gallon of gasoline. “If the milk is taken by truck, there is a fuel surcharge on it,” said dairy owner John Patterson.

“I have no way of passing it on to the next person. The price of milk has risen at the moment to offset some of it, but what if fuel and all these other inputs are high and the price of milk goes down?”

Patterson invests in larger equipment to pump fertilizer more efficiently and uses GPS to double travel to the same soil and avoid wasting valuable fuel. Illinois farmer Matt Bennett, co-founder of commodity brokerage firm AgMarket.net, notes that growers with “every crop” should be able to absorb higher energy costs as Chicago wheat futures grow 66% year-on-year, corn futures 35% and soybeans. 25%.

“The biggest problem I see is when the pendulum is swaying,” he said. “I’m not sure when this will happen, but if the price of the product goes down, the inputs will probably be higher.” He has helped clients hedge risks by investing in New York Harbor diesel and natural gas stocks in recent months. Bought Future. “When transportation costs go up, they don’t go down easily.”

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