Higher energy prices, resulting in part from a disjointed U.S. energy policy, are cutting deeply into the financial bottom lines of America's farmers and ranchers, according to the American Farm Bureau Federation.
Testifying today before a House Small Business subcommittee on behalf of AFBF, Missouri farmer Hal Swaney says increased energy costs over the 2003 through 2004 growing season have cost farmers more than $6 billion in added expenses to produce the food and fiber for this country.
"It is essential that we have access to reliable and affordable energy inputs including gasoline, diesel, electricity and natural gas," says Swaney, a member of the Missouri Farm Bureau board of directors who owns and operates a beef, row crop and tobacco farm.
Swaney says that natural gas is particularly important to agriculture because it is the base stock for the production of a range of farm inputs, including nitrogen fertilizers, crop protectants, and electricity for lighting, heating, irrigation and grain drying.
"Natural gas accounts for nearly 90 percent of the cost of nitrogen fertilizer," Swaney says. He told members of the subcommittee that his cost for purchasing nitrogen-based fertilizer jumped to $400 per ton in the spring of 2004, a 48 percent increase from 2002.
Swaney says 11 ammonia nitrogen fertilizer plants in the United States have permanently stopped production since 2000, representing a loss of 21 percent of domestic capacity. Farm Bureau believes that those losses and any further declines in the domestic fertilizer industry will have a negative impact on America's food security because U.S. agriculture will become more dependent on foreign energy imports to meet demand.
Farm Bureau continues to urge Congress to pass a comprehensive energy bill that would, among other benefits, increase domestic natural gas production and create increased opportunities for home-grown renewable fuels such as ethanol and biodiesel.