San Patricio County, Texas, farmers Bobby Nedbalek and Clarence Chopless thought diesel and fertilizer prices were too high when they put the 2004 crops in.
Apparently, the price jump was just flexing its muscles.
“Everything has gone up,” says Chopless, who farms cotton and grain in this south Texas county. He figures diesel prices are up 75 cents to 80 cents a gallon over last planting season.
“I booked what I could at $1.25,” he says, “and I thought it would work its way down. It didn't.”
He says the price of a cultivator he bought a year ago has increased about $1,000 a month since he bought his. “The cost of steel makes the difference,” he says.
Chopless and Nedbalek say they can do little about the higher costs. They can't pass them along to end users, as most businesses would. “We're still buying retail and selling wholesale,” Nedbalek says.
And they can't cut back on necessary production materials.
“I reduced fertility a little on some fields,” Nedbalek says. “That's about all I can do. During planting season, we were running behind because of rain, so we worked from can ‘til can't, and couldn't eliminate trips across the field.”
Chopless says he reduced fertility a little on dryland acreage but not on irrigated fields. Both say they've reduced tillage from what they were doing just a few years ago.
David Lucky, agronomy production specialist with Ag Reliance, says some of his clients reduced fertilizer rates slightly. “Some were spending around $44 per acre last year. This year, they've cut back to $30 to $35 per acre.”
He says some growers put out only N-32.
Fertilizer prices are up some 30 percent over last year. “We bought fertilizer as right as we could get it,” Lucky says. “We paid record high prices for nitrogen early and I thought we were crazy to pay that much. I never want to get caught buying at the peak. I'm always fearful that prices will go back down.”
Lucky says cottonseed prices changed little. “But the technology fees may have inched up a bit in some cases. The Roundup tech fee is up but the price of Roundup is lower,” he says.
“Ignite is slightly higher and Ignite seed is about $15 a bag higher. It was well received last year. Growers saw some full-season weed control advantages. Farmers liked the Liberty Link option of a longer application window.
“Some had to spray two times because of rain last year,” Lucky says, “but they were able to spray well into the season.”
He says many were successful controlling larger weeds with Ignite. “But they were succulent weeds. Growers have to make certain they cover the weeds thoroughly. That's a key.”
He says Envoke offers growers another cost-effective weed control option. “It looked good last year and offers an economical broadleaf weed control tool.”
Growers must know their weed populations to select the best herbicide. He says Roundup and Ignite might be the best bets where devil's claw, croton and other hard-to-manage weeds are trouble.
“If farmers don't have these, Envoke is a good option,” he says.
“Envoke seems to be gentle on cotton,” says Texas A&M Extension agronomist Steve Livingston, from the Texas A&M Research and Extension Center in Corpus Christi. “And it is economical.
“We're also doing some Roundup Flex tests this year. That gives us a longer application window for Roundup over cotton.”
Nedbalek says farmers also are turning to conventional varieties and saved seed to manage production costs. “Most farmers in this area are planting FiberMax 832, okra leaf cotton, brown bag seed.”
High energy costs
He says energy costs are too high. “We need to focus on bio-diesel and ethanol production,” he says. “Texas is dragging its feet compared to other states in developing bio-diesel and ethanol facilities. We have no reason not to capitalize on renewable fuels.”
He says a good energy bill has been held up for four years or more for “one reason or another. (Congress) just has not embraced it to get something going. That's why we're in the dilemma we're in now. I hope that with high energy prices this spring, they'll have an incentive to get it done.
“We have the technology (to make renewable fuels work),” he says. “We just don't have the will.”
He says engines currently in use on farms and for normal transportation should use ethanol (or bio-diesel for diesel engines) without retro fits.
“If it's available, people will choose it. We have environmental incentives.”
Nueces County Extension Agent Harvey Buehring says growers are looking for cost-effective ways to lower overhead, realizing that wholesale cuts on fertilizer or pest control will end up lowering yield potential.
“Our farmers' margins are extremely thin,” Buehring says. “Diesel, fertilizer and seed costs are all up. Five or six years ago, we were asking whether new materials and technology would get wide-spread adoption.”
He says cotton and other crops with transgenic traits made significant inroads into production strategies.
“Now, we have areas, especially in predominantly dryland sections, where cotton is extremely important and farmers are again caught in a cost/price squeeze. Many are looking for a cheaper source of seed that still provides good quality. We see a potential niche for public breeders,” he says.
Buehring says growers express concern for the dwindling level of support for their product. “We don't know how that will affect acreage,” he says. “Reductions in cotton acreage would affect our infrastructure, gins, warehouses and equipment dealers.”
He says cotton makes up 64 percent of the agricultural economy for Nueces County. Grain sorghum comes in a distant second at 29 percent. Beef and other livestock contribute 2 percent each and corn and other crops provide less than 1 percent each.
He also agrees that the feasibility of ethanol production seems a no-brainer with gasoline prices hanging above $2 a gallon. “Studies from 8 or 10 years ago showed that $2 gasoline makes ethanol a feasible alternative.”
He says the South Texas industrial infrastructure, with refineries already in operation, would make the area a natural for ethanol production. “And we have considerable grain storage capacity in the area.”
Buehring says the debate over fossil fuels versus renewable fuels favors the latter. He and many farmers are also convinced that agriculture benefits when producers can use their own products to raise crops.