Fuel prices pinch farmers      

[SEPT. 28, 2005]  URBANA -- Diesel fuel prices have increased substantially with no indication of declining in the future, confronting farmers with another economic challenge, said a University of Illinois Extension farm financial management specialist.

"The rise in diesel fuel prices has resulted in increased machinery costs for farmers," said Dale Lattz, co-author of "Effect of Higher Fuel Prices on Machinery Costs" with fellow Extension specialist Gary Schnitkey.

The report is available at http://www.farmdoc.uiuc.edu/manage/
newsletters/fefo05_17/fefo05_17.html.

"For farmers, the immediate question is how much machinery costs per acre have increased due to the higher fuel costs," said Lattz. "This is especially important to those farmers involved in custom farming arrangements."

Lattz said the increase in machinery costs per acre due to the higher fuel prices depends on a number of factors, including the size of equipment, efficiency and type of machinery operation.

"Our report includes tables that producers can use to determine these costs," he added.

One table in the report provides the estimated number of gallons of diesel fuel required for selected machinery operations, such as harvesting, tillage and fertilizer application. A second table provides fuel costs per acre for selected machinery operations with the price per gallon for diesel fuel ranging from $1 to $3, in 50-cent increments.

"For instance, fuel costs per acre for combining corn are estimated at $5.63 with the price of diesel fuel at $1.50 per gallon," said Lattz. "It increases to $11.25 per acre when the price per gallon of diesel fuel increases to $3.

"The most accurate way of adjusting machinery costs would be using the actual fuel requirements and fuel prices incurred by farmers."

[News release from the University of Illinois College of Agricultural, Consumer and Environmental Sciences]