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Consumers pay record prices as a result of soaring fuel, feed costs
By Paula Schleis
Beacon Journal business writer
Published on Sunday, Dec 09, 2007
It was a good year to be an Ohio farmer.
Many crops flourished and demanded record prices and milk flowed like liquid gold.
''This year has been a lifesaver for a lot of farmers,'' said Pam Sparks, a Farm Service Agency loan officer whose territory includes Medina County.
But consumers cringing at their supermarket bills shouldn't think the state's food providers are getting rich on $3 gallons of milk and $30 pounds of filet mignon.
Soaring fuel and feed prices have raised the cost of doing business, Sparks said. And as an industry inherently dependent on the whim of the weather, a good season is often an opportunity to make up for a poor one, she said.
''A lot of (farmers) are just catching up from some bad years,'' Sparks said. Here's Northeast Ohio's agricultural year in review:
Agronomic crops
Local corn and soybean growers didn't repeat the 2006 bumper crop, but few are complaining. The harvest was still larger than average, said Ron Becker of Ohio State University's extension office in Wayne County.
''We did very well this year,'' Becker said. ''We got the rains when we needed them.''
Even when July went dry for a spell, the clouds opened up just as the corn started to pollinate ''and that made all the difference,'' Becker said.
Many farmers also had reason to be pleased with their paychecks, with prices for corn and soybean almost doubling from two years ago.
Both crops are affected by the growing demand for corn in ethanol production, said Jim Ramey, director of the Ohio field office of the National Agricultural Statistics Service, a division of the U.S. Department of Agriculture.
In a NASS survey at the start of the season, Ohio farmers signaled their intention to plant 3.65 million acres of corn this spring, up 500,000 acres from the previous year, to feed the corn-hungry ethanol industry.
In October, NASS confirmed that 3.8 million acres had been planted.
And as the laws of supply and demand would dictate, that drove up the price of soybeans, which lost acreage to make way for more corn, Ramey said.
Corn, which was selling for $2 a bushel just two years ago, is going for $3.80, according to the USDA's Agricultural Marketing Service.
Soybeans, at $6 a bushel two years ago, is now selling for more than $10.
Wheat growers also did well, Becker said, and prices have climbed to nearly $8 a bushel. Ohio is the nation's top producer of the winter variety, which is harvested in June and used for cakes, pastries and crackers.
Alfalfa was the one major crop that took a hit this season, Becker said. Crops had reached 16 inches when a killing frost set them back and delayed the season's first cutting.
Most farmers got only three cuttings for the year instead of the usual four, Becker said.
Alfalfa — the hay used to feed dairy cows — is Ohio's fourth-largest crop and crucial to Wayne and Stark counties, two of the state's largest producers of milk.
So higher prices this year were only welcomed by those who were selling it. The crop, going for $125 to $150 a ton in recent years, rose to about $200 a ton this year.
Dairy farmers
After a dismal 2006, local dairy farmers had a lot to make up for this year.
The fact that milk prices reached a record high was a good start.
A decades-old pricing system bases the value of milk on the cost of a 40-pound block of cheddar cheese.
Last year, milk prices dropped to $12.52 per 100 pounds. That was down from $14.70 in 2005.
This year, the industry is estimating the year-end average milk price will be $18.78. That trounces the previous record of $15.44 in 2004.
It sure helps, said Heather Schofield, spokeswoman for the Dairy Farmers of America office in Fairlawn.
''Farmers across the country have experienced record-high prices, but with extremely high fuel and feed costs, it's not as good as it might appear on the surface,'' Schofield said.
''Certainly everyone is feeling the pinch of high fuel costs, and farmers are no different,'' she said.
Dennis Hartong, who runs the dairy farm on his family land in Green, said he's never seen milk prices this high.
At the same time, his costs have risen.
''It's a good thing that the price of milk is what it is just for the simple fact that any of the petroleum-based products we purchase, such as fertilizer, chemicals to plant crop or to feed the crop, were astronomical,'' he said.
Hartong, whose farm might be the the last working dairy farm in Summit County with about 100 cows, said his family still made a profit, but supply costs cut into it.
Produce growers
Prices were down for many locally grown vegetables, but greater volume apparently more than made up for it.
''The total checks we wrote to growers were up 30 percent'' over last year, said F.W. Owen, director of the Homerville Wholseale Produce Auction, a regional supplier of wholesale produce.
Tomatoes — the No. 1 item produced and sold at the Medina County auction house — were only bringing $4 or $5 dollars a box at mid-summer, Owen said. They sold for nearly twice that last year.
But price drops were much less dramatic for other produce, like strawberries and vine crops, and a bountiful harvest absorbed the pain.
Pumpkin growers had the best of both worlds, with higher prices and greater quantity.
''Every year the weather is up and down,'' Owen said, ''but all in all, it neither hurt us or helped us this year.''
Staff writer Betty Lin-Fisher contributed to this report. Paula Schleis can be reached at 330-996-3741 or pschleis@thebeaconjournal.com
It was a good year to be an Ohio farmer.
Get the full article here.
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