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High price of doing business is top ag story of 2005

Agriculture.com Staff 01/03/2006 @ 10:04am

If you were measuring by ink, column inches or Google results, Asian soybean rust could well be the top agriculture story of 2005. But, the U.S. soybean crop pretty much dodged the bullet. Other top contenders for story of the year made bigger marks on production of crops and livestock, and larger dents in farmers' bank accounts. Here's a recap of the top agriculture stories of 2005 as chosen by the editors of Successful Farming magazine and Agriculture Online.

Fuel, fertilizer prices chomp on farmers' wallets

When Hurricane Katrina struck the Gulf of Mexico in late August, lives were lost, homes and businesses were destroyed, and the landscape and spirit of New Orleans were forever altered. Farmers in the surrounding parishes and counties in neighboring states lost livestock and farm buildings. Many were without power for extended periods, left to rely on diesel-fueled generators.

Meantime, demand for petroleum products increased at the same time that the distribution infrastructure in the Gulf was reeling from the impact of the storm. Nationwide gas, diesel and natural gas prices doubled nearly overnight just as the nation's corn and soybean harvest got underway.

The result was that farmers further north, already dealing with harvest-low prices for their commodity crops, also faced greater costs to harvest them and get them to market. The one-two punch has producers concerned enough about the year ahead that USDA has launched a multi-faceted effort to help farmers and ranchers deal with higher costs for fuel in the coming growing season.

Targeting those who help themselves, USDA is showcasing an energy consumption awareness tool created by the Natural Resources Conservation Service (NRCS) as part of that effort. The tool shows the benefit of conservation tillage practices. Agriculture Online ran the numbers for a hypothetical mid-size farm in Iowa that raises 250 acres of corn and 250 of soybeans. With diesel prices at $2.44 per gallon, a grower could save about $3,900, (and 1,600 gallons of diesel) per year by using no-till rather than conventional tillage. Multiply that out and it starts to look like real money for the largest growers.

New nitrogen (N) fertilizer recommendations are another outcome in the aftermath of Katrina's waves. Facing yet another year of ridiculous increases in the price of N, which relies heavily on high-priced natural gas, agronomists at several land grant universities got together to reassess what they've been telling farmers. The result was a new set of application guidelines that could stem the tide of money flooding out of corn growers' bank accounts. The new rules take high prices and the cost of over-application into account, the old rules didn't.

It's a somewhat complicated formula, but Iowa State University Extension has created an online corn N rate calculator that will pencil out the maximum economic return based on guidelines for growers in some of the major corn-producing states.

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