Rising fuel prices hit farmers with a 'three-way whammy'

May 11, 2005|Associated Press

FRESNO, Calif. -- The farmers who grow many of the fresh fruit and vegetables for the nation's dinner tables say the rising cost of oil is making this one of their toughest planting seasons yet -- and might shove some of them out of business.

Drivers nationwide have had to pay more as political volatility and increased demand worldwide push up gas prices, said Ron Planting, an economist with the American Petroleum Institute. A barrel of crude oil now sells for as much as $55, up from $35 this time last year.

But farmers are the ones caught in a ''three-way whammy," said Keith Nilmeier, who just finished harvesting his 185 acres of oranges outside Fresno. Farmers are squeezed by higher prices for the diesel that runs their harvesting and irrigation equipment, for the fertilizer made by combining nitrogen with the hydrogen in natural gas, and for the transportation of crops to your local supermarket.

''We're the bottom link on this whole chain, and we have no one to pass our costs on to," said Nilmeier. ''We just have to take it and try to keep going."

Farmers nationwide have seen the price of fuel more than double, from 96 cents a gallon in April 2002 to $1.97 in April 2005. US farmers will spend about 10 percent more this year -- about $3 billion -- on costs including fuel and fertilizer, even as the price consumers pay for fruits and vegetables remains relatively stable, said Terry Francl, senior economist with the American Farm Bureau Federation, a Washington, D.C.-based group representing farm interests.