Running on empty: Farmers eye high diesel fuel costs as fall harvest underway
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With the fall harvest underway, farmers not only have to keep an eye on the weather, they're keeping an eye on their bottom line as high diesel fuel prices cut into any anticipated profits.
The price for diesel fuel used by farmers to operate their equipment stands at about $6.55 a gallon, not quite double the $3.98 they spent per gallon this time last year.
"Like anything else, the more you spend on fuel, the less profit you have to pay bills," said Daren Brubaker of Hemlock Farms near Williamsburg. "We are not able to pass on costs like the trucking companies. We can't set our own prices."
At the current price, it costs more than $2,000 to fill up the 320-gallon tank on his combine, about $800 more than it did last year.
The cost of diesel "is definitely cutting into any profits that could be made," said Doug Smith, co-owner of Dry Creek Farm near Martinsburg.
The uptick in fuel costs makes harvesting and transporting crops much more expensive, he said. In addition, milk haulers have put a diesel fuel surcharge on loads.
"The farmer has to absorb the price, he can't pass it on," Smith said.
Cambria County Farm Bureau President Marty Yahner said farmers, now more than ever, are frustrated that factors beyond their control affect their bottom line and ability to stay in business.
"Some commodity prices are higher than a year ago, but all input costs like fuel and fertilizer are much higher -- 40% higher," he said.
All drivers can see how much more it costs to fill up gas or diesel tanks on cars and trucks, Yahner said, but what many people may not know is that everything consumers buy is moved multiple times with a diesel engine.
"Almost all farmers are price takers, not price makers. We can't set our price for our products that we sell. We take what the market will give us," he said.
"President John F. Kennedy said the farmer is the only businessman who sells everything at wholesale and buys everything at retail and pays the freight both ways," he said. "That is still true today."
Pennsylvania Farm Bureau President Tommy Nagle recently called on the Pennsylvania General Assembly and President Donald Trump to take steps to lower prices at the pump, including a temporary suspension of the state and federal highway diesel taxes.
"Unprecedented diesel prices are hitting farmers at harvest time, which is one of the most fuel-intensive times of the year," Nagle said. "Diesel fuel is essential for the American economy and for farmers."
Diesel runs everything on a farm, including tractors, combines and irrigation equipment. Diesel fuel is also essential for transporting crops and livestock.
"Farmers and ranchers cannot postpone harvest or simply stop using diesel fuel when prices rise, so we ask that the Pennsylvania General Assembly and President Donald Trump consider temporarily suspending the Pennsylvania and federal highway diesel taxes," Nagle said.
Yahner said Gov. Josh Shapiro does not have the authority by administrative action alone, noting that legislative action would be necessary to move the fuel issue forward.
"Our decision to target the governor through this action alert was intentional. We want to encourage him to help jumpstart the effort and publicly call on the General Assembly to take action," Yahner said. "We have seen several bills introduced this year that would suspend the gas tax, including one from a Democratic senator. However, most of the proposals seeking relief have come from Republican legislators, who are in the minority in the House. While there has been some legislative interest, getting these proposals across the finish line remains a challenge."
Trump recently signed an executive order regarding red-dyed diesel fuel, which is not legal in Pennsylvania and several other states in the Mid-Atlantic, including Maryland and New Jersey.
Red-dyed diesel is chemically identical to regular (clear) diesel, but it is cheaper primarily because it is exempt from the 24.4-cent-per-gallon federal excise tax (plus applicable state fuel or sales taxes), said Pennsylvania Farm Bureau spokesman Will Whisler.
Red-dye diesel is tax-exempt because it's used to run farm equipment, construction equipment, to heat homes, among other uses. It is dyed so that it can be distinguished from on-road diesel fuel, which is sold with state and federal taxes and it is typically more expensive.
"Pennsylvania has one of the highest gas taxes in the nation," Whisler said.
When Trump signed the executive order that would eliminate the tax and allow farmers to use dyed diesel on roads for their vehicles through Dec. 31, it presents a break for them and also for trucking companies that are using a considerable amount of diesel each year, Whisler said.
"Farmers would need the general assembly and Gov. Shapiro to act for the executive order to be allowable in Pennsylvania. Currently, it is unlawful as it has always been, and the fines for running dyed diesel on the road if someone is caught are very high," Whisler said.
Farmers are concerned about what may happen if diesel fuel prices don't soon drop.
"The little farms are affected greatly compared to the big operators. My parents got out of dairy farming in 1988. Back then, they were complaining about the costs going up. This is similar to the 1980s. It is amazing how some farmers hang on, a lot don't," Brubaker said.
Mirror Staff Writer Walt Frank is at 814-946-7467.