FARMERS worldwide are feeling the pinch as fuel costs rise to near four-year highs just as they plant and harvest their crops, eroding agricultural income already hamstrung by depressed crop prices. The agricultural sector from the United States to Russia, and Brazil to Europe, is seeing profits harmed by the rise in diesel prices. The global oil benchmark, Brent crude LCOc1, touched US$80 a barrel for the first time since late 2014 last week. Coupled with local economic issues, the increase is making it even harder for many farmers worldwide to turn a profit in the estimated US$2.4 trillion agriculture industry, casting a cloud over future investments. In the United States, fuel accounts for about 5 percent of farmers’ overall costs, and is hurting margins at a time when farm income is already half that of 2013. Massive harvests have depressed prices of staples such as corn, wheat and soybeans. Diesel fuel is essential for planting, harvesting, and shipping crops to market. In the United States, farmers will spend an estimated US$15.25 billion on fuel and oil in 2018, an 8 percent increase from 2017, U.S. Department of Agriculture data showed. Ron Heck, who grows soybeans in Perry, Iowa, said his fuel costs could go up US$1,000 to US$2,000 during the northern hemisphere’s spring. “You feel the pain right away,” Heck said. In Russia, fuel prices for farmers are up 50 percent compared with a year ago, said Arkady Zlochevsky, the head of Russia’s Grain Union, a non-governmental farm lobby. Farmers will need to spend more ahead of harvesting, which starts in about a month in Russia, he said. In Brazil, farmers are also taking steps to deal with higher costs, as diesel prices have climbed 43 percent in the country since July 2017. (SD-Agencies) |