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Energy prices mixed bag for farmers

By Staff | Jun 14, 2008

High oil prices present a mixed bag for farmers who, while experiencing record prices due to corn demand for ethanol, are having to pay more for diesel and other energy-related inputs.

Larry Niles, Farm Service Agency director in Estherville, said Friday that northwest Iowa, though, seems to be about as good of a place as any to be farming given the massive flooding in the rest of the state where people were evacuated this week in Cedar Rapids, Cedar Falls and Des Moines.

Niles said the last week, though, has delayed field work for Emmet County farmers, particularly in Denmark and Jack Creek townships near Ringsted where water is ponding.

“Northwest Iowa is probably in as good of shape as anywhere in Iowa,” Niles said. Hopefully, he added, more heat units next week will help get yields back on track.

Niles figures yields have been hurt by 5-10 percent given late planting. Last year’s Emmet County corn yields averaged 165 bushels to the acre while they were 180 the year before. Farmers really needed the higher prices they’ve enjoyed the last couple years due to corn demand for ethanol production.

“Producers needed that boost we’ve had the last couple years,” Niles said.

While the energy crunch is helping farmers with higher corn prices, there’s a dark lining inside the cloud. Niles said record diesel prices are going to eat into profits. Still, farmers are coming out on the long end. Another factor is that late planting will require higher drying costs.

Niles underscored the need for public policy to address the energy crisis.

“I’m sure we’ve seen the last $3 gas prices,” Niles said. “It’s up to the auto industry to do their job now.” He said it appears that oil drilling also needs to be stepped up.

Niles said the public still hasn’t gotten past the smoke and mirrors of the myth that ethanol production has increased food prices. “It’s the fuel price that’s driven up food prices,” Niles said.

Niles said there are still slightly over 100 area farmers who need to get their planting acres certified. Those who replant also need to recertify.

Insurance companies need certifications by June 30.