Wednesday, May 23, 2001

Rising fuel costs mean corn on the cob from Maryland or apples from Virginia soon will face the same price pressures as produce that must be shipped long distances to local stores.

Tractors, irrigation systems and fertilizers all use petroleum, which costs farmers dearly as they compete in an industry already beset by economic problems.

The U.S. Department of Agriculture estimates fuel prices for farmers will rise 7 percent in 2001, costing them about $600 million more than last year.

“It’s having a tremendous impact on all the farmers out there, regardless of what crops they’re raising,” said Don Vandrey, Maryland Agriculture Department spokesman.

Farmers’ rising costs normally get passed on to consumers as higher food prices. One noticeable impact for Washington-area consumers will be in fruits and vegetables, Mr. Vandrey said. Unlike grains or meat, whose prices are determined by large Midwestern growers who dominate the market, many of the fruits and vegetables sold in local stores come from nearby farms that might be located in the same county.

“It will have some impact on your market vegetables and some of the produce in Giant and Safeway,” Mr. Vandrey said. “They aren’t driven so much by the Midwest market.”

The first big test is expected in July, when the tomato crops are harvested, he said. In the late summer and fall, the corn and apple harvests will come in.

In both Maryland and Virginia, major farm produce include tomatoes, apples and corn. In the next few weeks, the smaller strawberry and peach crops are due for harvest.

Equipment operation will create only part of the higher fuel prices, Mr. Vandrey said. The hardest hit will come after the crops are harvested because of “the cost of transporting them to market,” he said.

Craig Muckle, Safeway Inc. spokesman, agreed that consumers soon will see the effect of higher fuel prices in their food bills.

“It’s probably a foregone conclusion at some point,” Mr. Muckle said. The most noticeable effect will be in food items that must be transported great distances to the Washington area, such as avocadoes and pineapples from the West Coast, he said.

High fuel prices are forcing farmers to adopt techniques that consume less fuel.

Among them is “no-till” farming, in which equipment that makes only a small groove in the ground during planting replaces the discs that gouge furrows in the soil. Rather than trying to dig up weeds with tractor blades, farmers instead apply herbicides.

“It’s energy efficient,” said Steve Weber, Maryland Farm Bureau president, who also owns a 14-acre apple orchard in Baltimore County. “You don’t make as many trips across the field.”

For hard soils and crops that require deep planting, however, no-till often is ineffective, he said.

One of the most ambitious energy-conservation programs is run by Allen Family Foods Inc., which operates two poultry farms in eastern Maryland. They are installing a biomass generator at their Hurlock, Md., plant that uses poultry manure and wood chips to generate electricity. The generator is expected to pay for itself in 10 years through savings in power bills.

“It benefits the consumer, it benefits the farmer and it helps with power generation,” said Mike Pilcher, Allen Family Foods spokesman. “Two years ago, when it was really hot, we had some brownouts.”

The 4.2-megawatt generator will use about 40,000 tons of poultry manure and wood chips annually. The company says it will need only half the electricity to operate its plant. The other half will be sold to the local utility company.

Carlton Courter, Virginia Agriculture Department commissioner, said fuel and other production costs are forcing some farmers to forgo growing any crops this year on some of their property.

“It’s simply another unfortunate cost of business,” he said. “It basically comes right out of the farmer’s pocket.”

The Agriculture Department warns against panic about food prices. Federal policy-makers are expected to give farmers bigger subsidies this year to offset higher production costs, which is expected to keep food prices lower than without the subsidies.

“Direct government payments in 1999 and 2000 [combined] were above $20 billion,” said Chris McGath, an Agriculture Department economist. “We’ve got it forecast for about $16 billion in 2001. That’s a pretty major fallout.”

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