Fuel Costs Up Nearly 70%, Hurting Farmers

June 26, 2000

American Farm Bureau President Bob Stallman says the 70% increase in fuel prices from last year’s levels have increased farming expenditures $3 billion in the last year, adding to farmers’ woes over low commodity prices and increasing expenditures in other input areas.

"This increase places more strain on an agricultural community that hasn't benefitted from the booming general economy the rest of America has enjoyed over the past few years. Last year, farmers were paying around 80 cents per gallon for diesel fuel. Currently, the price of diesel fuel is running around $1.40 a gallon," said Stallman. "Consequently, farmers are paying approximately 70% more for their diesel fuel than a year ago at this time."

Crude oil prices have a profound impact on agricultural production costs, said AFBF. Crude oil prices averaged a little over $19 a barrel in 1999, with farm expenditures for petroleum fuels and oils totaling $6.4 billion. Present projections call for the average annual price of crude oil this year to approach $28 a barrel, which would push farm costs up another $3 billion from a year ago. Every dollar increase in crude oil prices raises annual farm expenditures for fuel and oil by about $330 million.