Higher energy prices, partly prompted by a disjointed U.S. energy policy, are cutting deeply into U.S. farmers' and ranchers' wallets.
That's according to American Farm Bureau Federation (AFBF) leaders testifying today before a House small business subcommittee.
Speaking for AFBF, Missouri farmer Hal Swaney says increased energy prices during the 2003- 2004 growing season have cost farmers more than $6 billion in added expenses.
"It is essential that we have access to reliable and affordable energy inputs, including gasoline, diesel, electricity and natural gas," says Swaney, a member of the Missouri Farm Bureau board of directors and owner-operator of a beef, row crop and tobacco farm.
Natural gas is particularly important to agriculture because it's the base stock for producing a range of farm inputs, including nitrogen fertilizers and crop protectants, as well as electricity for lighting, heating, irrigation and grain drying, Swaney says.
"Natural gas accounts for nearly 90% of the cost of nitrogen fertilizer," Swaney says. He also told subcommittee members that his cost for purchasing nitrogen-based fertilizer jumped to $400 per ton in the spring of 2004, a 48% increase from 2002.
Eleven ammonia nitrogen fertilizer plants in the United States have permanently stopped production since 2000, representing a loss of 21% of domestic capacity, the farmer says. AFBF leaders say those losses, and any further declines in the domestic fertilizer industry, will negatively impact Americaâ€™s food security because U.S. agriculture will become more dependent on foreign energy imports.
AFBF continues urging Congress to pass a comprehensive energy bill that would, among other benefits, increase domestic natural gas production and create increased opportunities for home-grown renewable fuels such as ethanol and biodiesel.