K-State Ag Today: High energy costs and CRP
9:53 a.m. Friday, August 1, 2008
Even before this year’s record-high oil prices, energy costs for Kansans doing business on the farm were rapidly escalating.
In 2007 alone, energy-related charges made up 45 to 47 percent of the rise in crop production costs, compared to the previous five years’ average. The 2002-2006 average itself reflected yearly hikes for both energy-related and total production costs.
K-State Research and Extension agricultural economist Michael Langemeier says the bottom line is that farmers’ energy costs per acre have more than doubled, just within the last six years, and that was before gas prices topped $4 per gallon.
Farmers wanting out of Conservation Reserve Program contracts early won’t be able to do it without paying a penalty.
Agriculture Secretary Ed Schafer says despite the severe flooding in the Midwest, indications are that the impact on this year’s corn and soybean crops will be less than originally feared. USDA says this year’s corn crop is on track to be the second largest on record with an anticipated harvest of almost 79 million acres.
Schaffer also says CRP acreage will shrink anyway as the 2008 Farm Bill reduces the maximum amount of land allowed in the program, as contracts expire, and as a growing number of farmers elect to pay the penalty and exit the program early.
More information is available on our Web site, at kstateagtoday.org.
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