High Energy Costs Hit Cotton Producers

By: By BETSY BLANEY Associated Press Writer
By: By BETSY BLANEY Associated Press Writer

LUBBOCK, Texas (AP) -- South Plains cotton producer Don Langston is eager for a "big rain."

Without it he'll have to keep irrigation pumps running to water thousands of acres of dusty, parched land so there's enough moisture to plant this year's crop in a couple of months.

He figures he'll spend as much as $50 more an acre than he did last year, when rainfall was plentiful, even by West Texas standards.

"We're going to have to have a good crop just to break even," Langston said. "I'm OK. Just need a big rain."

But for Langston and other agriculture producers across the U.S., electricity costs aren't the only concern. Diesel fuel and fertilizer prices also are weighing on them.

Last year, a farmer could buy a ton of fertilizer for about $450; the price tag is now closer to $1,000, American Farm Bureau Federation chief economist Bob Young said.

And when farmers and ranchers start up their machinery, their wallets will feel lighter.

Last year, 500 gallons of diesel cost between $500 and $800. This year it will cost about $1,500 to fill that same tank.

Most of the hikes in agriculture - as in other sectors - involve higher energy costs. Nitrogen fertilizer is made from natural gas, for which prices have increased sharply.

"It's pretty difficult to figure out when it's going to stop," said cotton producer Woody Anderson, a former chairman of the National Cotton Council. "Who knows when things are going to level off?"

Corn producers in West Texas also are feeling the pinch. Billy Bob Brown, who will grow corn and cotton near the town of Panhandle, 30 miles northeast of Amarillo, said it's going to cost him 46 percent more to plant 700 acres of corn.

Most of that is fertilizer, he said.

By his calculations he'll get 98 cents back for every dollar he puts into his corn crop. That's down from the $1.33 he made last year for every buck he spent.

"You can see we're not making quite as much money as people think," the 69-year-old said. "The need for a risk management is extremely important because of our high inputs."

Langston said his electricity costs will go up again during the growing season as utility companies add a surcharge, which is why early rain is critical.

"We could very well see a dry start which means producers will have to start watering from the time they plant, instead of having that bank of moisture," said Shawn Wade, spokesman for the Plains Cotton Growers, which serves 41 counties on West Texas' South Plain, the world's largest contiguous cotton growing patch.

Brown's emphasis on risk management includes weather that's typical in West Texas during spring.

"If a fellow were to catch a hail storm and lose a crop you'd have one heck of a financial loss," Brown said.

Portions of Texas, the nation's leading cotton producing state, have moved back into drought conditions, in part because of a La Nina weather pattern that brings warmer and drier weather patterns.

A two-year dry period in Texas ended in 2007, the seventh wettest year on record, with 10 inches more than the normal average rainfall. Lubbock is currently about .75 inches behind normal, compared to 2.5 inches above normal this time last year.

The state was expected to plant half of the nation's forecast 9.5 million acres of cotton in 2008. Texas' tally is a drop of 2.3 percent from last year; the U.S. number is a 12 percent decrease from 2007.

Producers also are wondering whether they'll see a completed farm bill any time soon. The current one officially expired in the fall. Congress voted to extend that to April 18, and there has been talk of extending it another year.

"That's the big question mark in all of our minds," Anderson said. "The uncertainty of not having a farm bill certainly adds to the anxiety."


On the Net:

Plains Cotton Growers: http://www.plainscotton.org

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