Like others across the country, Louisiana farmers are entering the spring planting season facing extraordinarily high prices for fuel and fertilizer. But LSU AgCenter specialists say those higher costs aren't likely to cause many shifts in crops traditionally grown here.
“Increases in energy costs are affecting the cost of fertilizer, diesel fuel and, to some extent, some of the herbicides,” said Gerald Giesler, an economist with the LSU AgCenter.
Each year, the LSU AgCenter's Department of Agricultural Economics and Agribusiness projects costs for producing major commodities, including cotton, rice, soybeans, corn and wheat.
“In our budgets, fuel prices this year are at $1.17 per gallon for diesel compared with 79 cents per gallon last year,” Giesler said.
The influence of fuel costs depends on tillage practices, according to Walter Morrison, an LSU AgCenter corn and soybean specialist.
“Many farmers have gone to no-till corn or soybeans,” Morrison said, explaining that since the seedbed is prepared in the fall for spring planting, many fields were worked last fall when fuel prices were lower.
On the other hand, rice farmers are more affected by high fuel costs because of irrigation, said LSU AgCenter rice specialist John Saichuk.
Giesler said the cost of energy for irrigation pumps is expected to be nearly 50 percent higher in 2001 than in 2000 — “costing farmers more than $90 an acre.”
But because of their location and the lack of a suitable crop that could replace rice, rice farmers don't have any alternative, Saichuk said. “It's either grow rice or nothing,” he said.
In addition to the cost of fuel, farmers also are facing increased costs of nitrogen fertilizers, which are manufactured from natural gas, and, to a limited extent, crop protection chemicals, which are made from petroleum, Giesler said.
Giesler said nitrogen fertilizer costs in 2000 were budgeted at 18 cents per pound, while in 2001 they're at 25 cents per pound.
“For cotton, using 90 pounds of nitrogen per acre raises the fertilizer cost from $16.20 to $22.50,” he said.
But cotton isn't grown in all parts of Louisiana, and farmers who plant cotton don't plant only cotton.
“Crops that use nitrogen are most affected — corn more than others,” Morrison said.
“There's no doubt acres in corn will be reduced because of the cost of fertilizer,” Morrison added.
Soybeans, which don't require nitrogen fertilizer because they make their own nitrogen, are an alternative, but the crop doesn't yield well in Louisiana, particularly in the southern part of the state, Morrison said.
“Farmers are facing a complicated situation,” Morrison said. “Cotton has the brightest outlook as far as prices go, but soybeans are the cheapest crop to grow.”
Soybeans also have the most attractive government program — considering current prices and federal loan deficiency payments that offset low prices, Morrison said.
This year, Morrison is recommending corn farmers fertilize at rates of 160 pounds of nitrogen per acre rather than higher rates they often apply on corn.
“Our experiment station has never shown much economic benefit for fertilizing above 160 pounds of nitrogen,” Morrison said.
Although he doesn't expect a large shift from corn to soybeans in Louisiana, Morrison said energy costs will affect acreage in the Midwest, “where they make good yields.”
Giesler agrees. “Nationally, particularly in the Midwest, energy prices will cause farmers to switch to soybeans because of the high nitrogen cost on corn,” Giesler said, adding he doesn't foresee Louisiana farmers making many changes.
“Farmers won't change cotton acreage because, given the prices of corn and soybeans, plus the government programs, there's no better alternative,” Giesler added. “And there's no good alternative for rice.”
The economist suggested farmers watch costs closely. “They should cut costs that don't cut yield,” he said, adding, “It's always a good practice, but especially in tough times.”
Giesler said farmers are anticipating help from federal farm programs again this year, adding that previous government programs have helped keep farmers afloat.
“The farm situation is woeful,” Giesler said. “But without the farm programs in the past few years, it would be horrible.”
Rick Bogren writes for the LSU AgCenter.