USDA Farm Bill Won't Curb Rising Costs, Farmers Say

US - Farmers, angry over rising farm fuel costs, energy and fertilizer say the USDA is not doing enough to help and even though grain crop prices are at record highs - so are the costs associated with them.
calendar icon 24 April 2007
clock icon 4 minute read

Last year, Agricultural representatives from across the country were doling out advice about cutting back on watering, planting techniques and using alternatives to commercial fertilizer in an attempt to cut operating costs. But even though some of that advice was sound, most farmers have had to get creative and find their own ways around a growing problem - the rising cost of farming.

Dan Varner a farmer from Arkansas said, "The cost of commercial fertilizer this year has risen 25 percent while chicken litter jumped nearly 50 percent." And Varner's not alone in his frustration after many farmers who opt for using chicken litter are seeing salt levels build up in their fields. Varner, a cattle farmer, said that calves this year are only up about 3% over last year's price while costs keep going up. His answer was to search out an alternative fertilizer source for his hay crop that not only saved him money, but didn't leave a salt residue in his topsoil.

"I chipped in with a neighbor and bought GOLD'n GRO from Itronics in Reno, Nevada," said Varner. "Another farmer I know told me about it last year."

Varner said his cost-cutting effort should allow him to show a slight profit, though he admitted that he also used a type of corn syrup that was a by-product of ethanol manufacturing as a feed supplement, but added that in comparison to commercial nitrate fertilizer and chicken litter, his decision to go with a more environmentally friendly liquid fertilizer will pay off the most.

Itronics Inc. (OTCBB:ITRO) reported Tuesday that fertilizer sales rose 26 percent in 2006. While the maker of GOLD'n GRO liquid fertilizer only made $86,000 in gross profit last year, it was a historical first for the company.

Itronics, like other small fertilizer companies, battled with years of environmental hurdles state-by-state before it could even begin selling in those markets. This year Itronics GOLD'n GRO fertilizer caught the eye of the University of Utah where the first in a series of corn crop tests showed promising results.

But that doesn't stop entrepreneurial farmers like Varner from buying fertilizer from Itronics on their own. Now, the Reno-based company hopes that in time it will enter the vast multi-billion market serving corn farmers, though again, it will be a state-by-state regulatory battle.

Across the grain belt States many critics say those farmers growing soybeans and corn are going to make money this year thanks to record-high crop prices. But poultry, beef and hog farmers say the cost of feed is too high and they're looking to cut back on production levels because of it. Grain farmers too say they're not really coming out ahead after the cost of energy rose nearly 23 percent this year and fertilizer costs even more. Some worry about even having enough commercial fertilizer to go around thanks to rising demand from the massive increase in corn acreage this year.

Housewives too are feeling the pinch.

According to the latest government report the cost of food in the first three months of this year rose 7.4 percent on an annualized basis and with record-high grain prices and cutbacks in cattle, pork and poultry production, consumers could see a double-digit rise in the cost of food this year.

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