Newspaper Page Text
WEDNESDAY, JUNE 18, 2008
THE BANKS COUNTY NEWS
PAGE 11A
Rising production costs hurt Georgia farmers
Rising production costs - what it costs a farmer
to produce a crop - are consuming most of the
profit farmers might receive from the record
prices crops like corn and soybeans are bringing.
“Although some crops are bringing record
prices, farmers are paying record prices for things
such as fuel, fertilizer, feed and seed that go into
producing our crops and raising livestock,” said
Henry D. Banks, Banks County Farm Bureau
president. “The higher commodity prices our
crops are bringing are barely covering our higher
production costs. We’re feeling the pinch of
higher fuel costs just like our customers.”
Higher energy prices, increased demand from
China and India for agriculture production sup
plies and the weak value of the U.S. dollar are
all factors contributing to higher production costs
for farmers and ultimately higher food prices for
consumers, economists say.
“There’s been a significant increase in the
world demand for agricultural supplies used in
producing crops that are made from petroleum.
In the last five years, there has been about a
14 percent increase in the demand for fertilizer
worldwide reflecting the population and consum
er growth in China and India. In the U.S., we’ve
actually seen many of the plants that produce
nitrogen fertilizer shut down, so we’ve lost about
40 percent of that production capacity and are
importing about 50 percent of the nitrogen we use
in the U.S. We also import over 90 percent of the
potash products we use for fertilizer,” explains
University of Georgia agricultural economist Dr.
John McKissick. “Keep in mind that the dollar
has depreciated about 25 percent in the past five
years. This means the prices of imported input
products have increased about that much. It’s a
combination of all these factors that have pushed
up production costs.” UGA economists predict
it will cost Georgia farmers 14 percent more to
grow cotton this year than last and 49 percent
more to grow corn. The production costs for
growing peanuts are up 21 percent from 2007,
while the production costs for soybeans are up
49 percent. Since 2002, costs are up between
40 and 75 percent for these same crops. All of
these production costs estimates are for irrigated
crops. Drought conditions or sporadic rain make
it necessary for farmers to irrigate their crops.
Irrigation systems are fueled by diesel fuel or
electricity, both of which have seen price increas
es. In 2007 alone, total cash farm expenses rose
to $222 billion, according to the USDA.
“As supply and demand conditions change, the
prices farmers receive are most likely to fluctu
ate, whereas the cost of production inputs, such
as fertilizer, are more less likely to weaken,”
explains McKissick. “Rising production costs
have eroded many of the benefits farmers are
perceived to reap from high commodity prices.
For perspective, consider that food prices have
increased only about four percent in the last 12
months.”
Glenn Waller, a row crop and cattle farmer in
Washington County, has recorded the prices he
has paid for production supplies and the income
he has made from his crops since 1965. In
1998, he joined forces with Washington County
Extension Agent Sidney Law to compile this data
to chart how production costs, farm income and
food costs have risen through the years.
“Farmer costs have increased almost 12 times
what they were in 1965 to 2008, however the
most important person in the food production
process, the farmer, has only received an increase
of 1.5 times for the farm products he produces
during the same period of time,” Law explained.
“However, during the same time period, food
prices have increased more than seven times.”
Farmers receive only 19 cents out of every retail
dollar spent on food, according to the USDA
Economic Research Service. Off-farm costs,
which include marketing expenses associated
with processing, packaging, wholesaling, distrib
uting, transporting and retailing food products,
account for the remaining 81 cents of every retail
dollar spent on food.
In 1968, farmers received $1.50 a bushel for
corn. By 2006, corn was bringing $2.68 a bushel.
Today it’s averaging about $6 a bushel. That’s
an increase in farm income from corn of only
233 percent from 1965 to 2008. Meanwhile,
cornflakes costs 31 cents per pound in 1965,
cost $2.99 a pound in 2006 and $2.82 a pound in
2008. That’s an increase in food costs to consum
ers of 810 percent from 1965 to 2008.
In 1965, it costs Waller $12 to buy a bushel of
seed corn for planting. By 2006 seed corn had
risen to $95 a bushel, and in March 2008 seed
corn cost $150 a bushel. In 1965, Waller paid $38
a ton for standard fertilizer that contains nitrogen,
potassium and phosphorus. By 2006 a ton of the
same fertilizer costs $268. Today the fertilizer
averages $420 a ton. In 1965, Waller paid 15 cent
for a gallon of diesel fuel, which is used to run
most farm equipment, By 2006, diesel fuel aver
aged $2.46 a gallon. This year it’s averaging more
$4 a gallon. In 1965 a 94 horsepower (HP) trac
tor that Waller uses to plant his corn crop costs
$6,500. The cost of a tractor with the same HP
costs $53,000 by 2006, and it cost $58,000 today.
In 1965 a four-row grain combine Waller uses to
harvest his corn crop cost $69,000. By 2006 the
cost of a combine rose to $153,000 and increased
an additional $333 in 2008.
“American consumers enjoy the most stable
and safest food supply in the world thanks to the
efficient agriculture infrastructure we have in our
country. USDA statistics show that American
shoppers spent less than six percent of their
income on food in 2006, a lower proportion than
any other nation. In most of the world, consum
ers spend as much as 55 percent of their income
on food each year,” Banks said. “If we think we
have problems now because we are dependant on
imported fuel, imagine life if we were dependant
on imported food.”
Founded in 1937, Georgia Farm Bureau is the
state’s largest farm organization.
Free HIV testing to be offered June 27 Health department hours expanded
The Banks County Health
Department will offer free HIV
tests on Friday, June 27, from 8
a.m. to noon.
The free screening is in obser
vance of National HIV Testing
Day. Patients may learn about their
HIV status in 20 minutes.
The Center for Disease Control
and Prevention says up to 1.1 mil
lion Americans are HIV positive,
with 225,000 to 315,000 people
not knowing that they are infect
ed.
In an effort to accommodate
working parents, the Banks County
Health Department is offering ser
vices until 7 p.m. every Tuesday
during the month of June and
July.
The office will close at noon on
the first Friday of the month and at
3 p.m. on the other. The later hours
are intended to help parents get
their children’s immunizations and
to utilize other health department
services.
For more information, con
tact the health department at
706-677-2296.
AARP to sponsor candidate debate
All three candidates run
ning for the United States House
of Representatives from the 10th
Georgia Congressional District will
be participating in a candidate debate
sponsored by AARP Georgia at 6
p.m. on Tuesday, July 1, at Cornelia
United Methodist Church
The debate will be moderated
by April Reed from Windstream
Channel 4 and the panelists are
Michael Harvey from WCON-FM
and Kenneth Melichar, a professor
of sociology at Piedmont College.
AARP Georgia has 1.1 million
members in Georgia and 85,118
members in the 10th Congressional
District. Anyone interested in the
debate, regardless of age or AARP
membership, is welcome to attend.
“We are looking forward to the
opportunity to find out where each
of these candidates stand on issues
important to us,” said Michael
Carroll, AARP member and volun
teer from Cornelia. “This is a rare
opportunity to be able to compare
- side by side and apples to apples -
the candidates seeking to represent
us in Congress.”
Republican Primary opponents
Congressman Paul Broun and
Representative Barry Fleming, as
well as Democratic party nominee
Bobby Saxon, will be at the event.
Cornelia United Methodist Church
is located at 275 Wyly Street,
Cornelia.
Call 367-5233 to subscribe to
The Banks County News today!
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