NAWG President Testifies on Fuel, Fertilizer Costs

In written testimony for a Senate Committee hearing in November on the crisis in fuel and fertilizer costs, Oregon farmer and president of the National Association of Wheat Growers, Sherman Reese, pointed out that for the first time since the Great Depression, a gallon of diesel fuel is more expensive than a bushel of wheat.

“One of our Minnesota growers wrote me to report his diesel costs are 54% higher than one year ago, and concluded by noting, unlike other sectors of the economy, I cannot add a fuel surcharge to my bushel of wheat when I sell it at the local elevator, and soon it will be time to secure credit for the next crop year.  Another of our North Dakota growers reported it costs him $1,500 each day just to run his combine. I could go on, but the testimonials I have been receiving are all saying the same thing and suggest we are facing a growing financial crisis.”

Reese wrote in his testimony that NAWG has been supportive of efforts to expand U.S. oil and natural gas supply through a more aggressive drilling program and an expansion of refining capacity. “But many of our members may no longer be farming to take advantage of a greater supply of $60 to $70 per barrel oil,” he noted.

Jimmy Westerfield, president of the McLennan County Texas Farm Bureau, was recently quoted in a Rockford Illinois Rock River Times editorial raising an alarming prospect: what if, one by one, many farmers are forced into the painful decision that they can’t afford to plant this year and the next? How many such decisions will it take to produce nationwide, the bare grocery shelves brought about by Katrina and Rita? Westerfield added that in that circumstance food would be imported, but said, ‘do we really want our food supply at the mercy of producers outside our own borders?’ I would further suggest that outsourcing of our food and fiber needs is not in the national security interests of the United States.

“I understand that many other industries are impacted by rising fuel costs but again, unlike other industries, production agriculture has no way of passing those costs on. We are at the end of the tailpipe.”

Reese suggested that the scale of farm assistance necessary to help growers survive higher input costs is equal to the level of the Decoupled Direct Payment received by producers. The Direct Payment mechanism is well understood by producers and their creditors, and simple to administer, he wrote.

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