Home / Markets / Markets Analysis / Burnin' fuel on the farm: It's all relative

Burnin' fuel on the farm: It's all relative

Agriculture.com Staff 02/11/2016 @ 9:02am

The big news in Nebraska this week is a vote by the legislature to increase the gasoline tax by a penny per gallon. It raised a fury normally caused only by such earth-shaking events as a losing football season. The uproar caused me to think back to earlier experiences with high-priced fuel.

In 1990 Sharon and I took a trip to Europe. While there we borrowed a car. Imagine how happy we were to see a sign with ".90" on a filling station. We did not realize until we stopped to fill that the price was Deutsch marks per liter. In US dollars it figured out to about $4 per gallon. That was when gas in this country was about $2 per gallon.

I had similar experiences last summer and in January of this year when traveling in Canada. While north of the border I rent a car to travel to small towns. The price of gas was $.99 both times I was there. However, that price is Canadian dollars per liter, or around $4.00 U.S dollar per gallon.

The German economy apparently has adjusted to the high price of fuel. The car we drove while there was a Volkswagon Jetta diesel. It had a manual transmission and no air conditioning. We drove for days on a tank of fuel. The car was comfortable and easy to drive. Other than a lack of air conditioning it made good, cheap transportation.


Likewise it seems as if Canada has adjusted to the higher price of fuel. Destinations are closer together in Ontario than in Nebraska, but otherwise travel is similar. They farm much as we do and there are semi trucks hauling grain in the farm country just as there are here. I am sure that they are not happy with the price of gas and diesel, but I did not detect a big uproar while I was there.

It strikes me as strange that a penny added to the gas tax is such a big deal. That amounts to .0031 percent on $3.25 gas. I don’t like paying $50 to fill my tank any more than anyone else. Still, compared to drivers in other countries, folks in Nebraska have had it good. Let's face it, oil is a limited resource. We are using it faster than new sources are being found. If that trend continues and new fuels are not developed, $3.25 gasoline will look cheap in the future.

I do not envy farmers in remote areas who absolutely must buy gasoline or diesel to transport their goods to and from markets. However, I do see ways the economy could adjust that might be good for agriculture. First, I would hope that the cost of driving to the big city for employment would slow the development of good farm land for residential acreages. I say this having a daughter and son-in-law who both drive 50 miles round trip from here to Omaha each day to work.

Second, I would hope that farm diesel fuel over $3 would cause farmers to re-think tillage passes in crop production. No-till is a big fuel saver. The higher the cost of fuel, the more economical reduced tillage systems are. The reduction in erosion is an additional long-term benefit that eventually will be a big factor in profitability.

CancelPost Comment

Farm and ranch risk management resources By: 07/07/2010 @ 9:10am Government resources USDA Risk Management Agency Download free insurance program and…

Major types of crop insurance policies By: 07/07/2010 @ 9:10am Crop insurance for major field crops comes in two types: yield-based coverage that pays an…

Marketing 101 - Are options the right tool… By: 07/07/2010 @ 9:10am "If you are looking for a low risk way to protect yourself against prices moving either higher or…

This container should display a .swf file. If not, you may need to upgrade your Flash player.
Ageless Iron TV: Tractors at War