Ohio farmers have been faced with a trifecta of challenges this planting season — skyrocketing fuel prices, overseas turmoil in Ukraine and heavy spring rains — that are impacting their bottom line and could trickle down to consumers.
Diesel fuel prices have nearly doubled from last year, the Russian attack on Ukraine has increased fertilizer prices by more than 230% and constant rain has delayed corn and soybean planting across the state.
“Ohio farmers are trying to navigate through the circumstances they are facing with rising costs,” said Ty Higgins of the Ohio Farm Bureau. “It’s going to be a challenge for farmers to watch the bottom line with prices for seed, labor, diesel fuel and equipment keep going up.”
At this point, Higgins said farmers are seeing higher commodity futures and if that continues along with a successful harvest, they will be able to pay their bills. Corn, for example, has climbed from $4.07 per bushel in November 2020 to $7.70 per bushel this month, according to the Chicago Mercantile Exchange.
However, if the commodities go down, farmers could lose money because of increased expenses, Higgins said, and consumers could see higher costs for food. The food price index in May increased 10.1 percent compared to the same time last year. That’s the first increase of more than 10 percent since 1981, the U.S. Bureau of Labor Statistics reported Friday.
Prices for food at home increased 11.9 percent in May year-over-year. Within that category, chicken prices were up 17.4 percent, the largest increase ever recorded. Pork prices increased 13.3 percent; bacon, 15 percent; milk, 15.9 percent; coffee, 15.3 percent; and fruits and vegetables, 8.2 percent.
Driving the concern for farmers is the expenses to get their crops in the ground.
Higgins said diesel prices for farmers have gone from about $350 a day to $700-$800 a day to operate their equipment. On Friday, a gallon of diesel in the region was $5.93 compared to $5.50 a week ago and $3.29 a year ago.
And he said the turmoil in Ukraine is having an effect as the country is a supplier of natural gas that is used to manufacture fertilizer. In addition, Higgins said farmers may be asked to plant more wheat to make up the difference for production losses due to the war in Ukraine.
The sticker price for anhydrous ammonia is up 235% compared to a year ago; the nitrogen fertilizer urea rose 149%; and liquid nitrogen is up 192%.
Fertilizer is 30% of the average farmer’s expenses, according to the U.S. Department of Agriculture.
Finally, the weather has been another challenge.
“You can hear it in their voices that farmers are frustrated because they feel Mother Nature dealt them a bad hand,” Higgins said.
He said farmers are becoming very good at mitigating the shorter planting and harvesting windows by using technological improvements and larger equipment.
“We still have a lot of farmers trying to finish their planting,” Higgins said. “They want to be done by early June, but April and May were cold and rainy in 2022. So far, 29% of the state’s soybean crop and 15% of the corn crop have yet to be planted as of Wednesday.”
He said farmers are resilient, resourceful and are ingenious because they always seem to figure it out. Higgins said they’ve been good at this for generations despite Mother Nature, policies and prices.
Land costs an issue
While higher fuel costs cut into his bottom line, Craig Corry said land cost is his biggest expense. He said fertilizer and higher energy costs are up there as well. Other costs of doing business at his farm in north central Greene County include the price of seed and machinery.
“An acre is an acre,” Corry said. “It’s hard to cut corners on fertilizer and inputs. I’ve seen higher grain prices (futures), but you still have to produce it.”
He said the unknown factor is weather but he was able to complete planting his corn and soybean crops. Corry said sunny weather and moist ground has resulted in good early growth. He farms 500 acres, growing corn, soybeans wheat, and hay in addition to raising beef cattle.
“One more window of dry weather should help,” Corry said. “But everybody’s situation is different.”
He believes in 2022, farmers will be spending more per crop/per acre than ever before.
As for Ukraine, Corry said its “disturbing” to watch what is happening there. “Agriculture is a major part of their economy, similar to our ‘I’ state (Indiana, Illinois and Iowa). Corn is king in the U.S., followed by soybeans, but wheat is a world crop.”
Busy planting season due to rain
Brian Harbage of Clark County said he’s been “busy, busy, busy as we’re not done planting soybeans.”
Harbage said Wednesday he had another 180 acres to plant and was hoping to dodge the rain coming in. He owns a mid-sized farm. With his wife and two sons, they grow soybean, corn, wheat, hay and raise cattle.
Credit: Bill Lackey
Credit: Bill Lackey
“It doesn’t take long to plant when you have the window,” Harbage said.
This year, he said fuel prices are more than double and input (seed, fertilizer, etc.) prices are up as well.
Harbage said the Ukraine situation have pushed the markets higher for corn, soybean and wheat a bit higher. He said, “the market will offset but other things will take money away from the farmer.”
“Farmers buy retail, sell wholesale, and can’t pass on the costs to anyone else,” he said. “We’re stuck. People assume farmers are getting more. But that’s not the case. It’s the middle man.”
Dean Thompson of Darke County has farmed 1,400 acres with his brother for the past several years. This year was different as his brother opted to retire leaving Thompson to transition the operation to his one of his two grandsons who will be taking over in the next two years.
Despite the wet weather, Thompson said they were lucky to nearly have 90% of their crops planted.
“Last year was not as wet as this one when three to four weeks of rain put us behind,” Thompson said.
He said the uncertainty about Ukraine will help keep commodity prices up. While Thompson said farmers are used to seeing the commodity prices go up and down, he said the prices for machinery, inputs, parts and repairs will continue to go up.
“When you’re not making money, it’s tough to be a farmer,” he said
Dealing with expenses
Gail Lierer said she ordered off-road diesel fuel last month for $4.61 a gallon for her 900-acre family farm in southwest Butler County. Thirty days later, the price went up 30 cents a gallon and is still going up.
“At $5.40 a gallon, you can’t be loyal to the people you’ve been buying from for years,” she said. “You have to shop around and you need to be price savvy.”
Lierer said her parents moved here in 1945 and she and her husband David took it over in 1983 during a drought. In 2019, they finished planting June 20, the deadline to purchase crop insurance. The family farms soybeans, hay and corn.
She said the span to to plant crops is becoming shorter and knows of some farmers who have acres of soybeans yet to plant. Lierer said she sells crop insurance and has been receiving calls of possible scenarios.
“It’s not good,” she said. “It’s a bad year all the way around. Fertilizer prices are through the roof and the costs for parts and transportation are outrageous. It’s a continuation of problems and last year didn’t help.”
Another Butler County farmer, Tim Hesselbrock agreed: “It’s bad this season. We’re three to four weeks behind.”
While wet weather has been a major problem, Hesselbrock said the costs of phosphorus fertilizer went from $385 to $1,500 a ton long before the war in Ukraine began. He said it’s the new normal -- create a shortage, then run the price up. Other inputs into the soil have seen similar drastic increases.
Hesselbrock, who is president of the Butler County Farm Bureau, said his family operates a 3,500-acre farm where they grow corn, soybeans, beans and hay.
“We’re hoping the market stays up and helps us,” he said. “We’re hoping to get through this year. Everyone is disappointed about the weather. The later you plant, the less the yield.”
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