Serving Whitman County since 1877
Serving Whitman County since 1877
Rising fuel prices and a weakening dollar are making it more expensive to eat - or grow - food.
Prices on grocery store shelves are going up, in large part because of higher costs of transporting food to the market.
“It all trickles down to the store,” said Shawn McAdams, manager of Rosauers in Colfax. “Fuel goes up and everything starts to go up.”
McAdams said prices on high volume items like milk are the first to show the effects of higher diesel prices.
The American Automotive Association said gas prices have risen 87 cents in the past year.
But other factors, too, are pushing up the price of food.
Rosauers last week posted a sign advising customers that unusual freezes in southern growing states and Mexico are increasing the price of produce.
McAdams said milk and meat are also going up because corn, used to feed livestock, is now turned into ethanol.
Meanwhile, farmers looking to put spring crops in the ground will have to do so by putting costlier diesel in their tractors.
“The last time diesel went up so high, people were like ‘How can you afford to farm?’” said Kate Painter, an agricultural economist at the University of Idaho.
A typical farmer uses just under five gallons of fuel per acre to plant, harvest and transport a crop. With diesel going for almost $4.50 per gallon at the pump - about $.50 less for farm-grade diesel - farmers are looking to spend more than $20 per acre on fuel alone.
“That is nothing compared to just say a very average amount of fertilizer,” said Painter. “Fertilizer is definitely the scariest part of what we’re seeing right now.”
Fertilizer prices have risen steadily over the past six months.
Fred Morschek, chief of McGregor’s fertilizer division, said crop prices are helping drive up fertilizer.
“Because crop prices are so high, more people around the world are planting wheat,” said Morschek.
Droughts in Russia and Australia shot wheat prices up over the past year. As of Tuesday, soft white wheat was going for $7.90 per bushel. Last April, wheat sold for $4.20 per bushel.
That makes it a more attractive crop around the world.
“So now, our growers have to compete for fertilizer with a global market,” said Morschek.
Hurting them in that market is the weakening U.S. dollar.
Seung Mo Choi, an assistant economics professor at WSU, said the Federal Reserve’s decision to hold down interest rates and release more money in an attempt to stimulate the U.S. economy has devalued the dollar.
“That makes oil, food, everything we trade globally more expensive,” said Choi.
In addition, Choi said the political instability in the Middle East makes oil prices less predictable which in turn will make it a costlier commodity.
“The volatility is just hard on everybody,” said Painter. “The good news is the price of grain is up pretty high, so I think farmers are in a good profession right now.”
Painter has developed a budget calculator for farmers to gauge their input costs versus commodity prices. It can be accessed from her web site:
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