Fuel Prices Pinch Farmers

New report, "Effects of Higher Fuel Prices on Machinery Costs," provides way for producers to figure machinery costs. Compiled by staff

Published on: Sep 29, 2005

Diesel fuel prices have increased substantially with no indication of declining in the future, confronting farmers with another economic challenge. A new report from the University of Illinois may help in knowing the impact on your operation.

"The rise in diesel fuel prices has resulted in increased machinery costs for farmers," says University of Illinois Farm Financial Management Specialist Dale Lattz, co-author of "Effects of Higher Fuel Prices on Machinery Costs" with fellow Extension specialist Gary Schnitkey.

"For farmers, the immediate question is how much machinery costs per acre have increased due to the higher fuel costs," says Lattz. "This is especially important to those farmers involved in custom farming arrangements."

Lattz says the increase in machinery costs per acre due to the higher fuel prices depends on a number of factors, including the size of equipment, efficiency and type of machinery operation.

"Our report includes tables that producers can use to determine these costs," he added.

One table in the report provides the estimated number of gallons of diesel fuel required for selected machinery operations such as harvesting, tillage, and fertilizer application. A second table provides fuel costs per acre for selected machinery operations with the price per gallon for diesel fuel ranging from $1 to $3 in 50-cent increments.

"For instance, fuel costs per acre for combining corn are estimated at $5.63 with the price of diesel fuel at $1.50 per gallon," says Lattz. "It increases to $11.25 per acre when the price per gallon of diesel fuel increases to $3.

"The most accurate way of adjusting machinery costs would be using the actual fuel requirements and fuel prices incurred by farmers."