Feeling the pinch
Brian Holmes, a delivery driver with Ezell
Suty Fuel, fills a storage tank Tuesday with
off-road diesel fuel for Gene Culver at
Culver's home on Reeder Road. Diesel fuel
prices have gone up more than a $1 a gallon
in the past few years.
By HOLLY OWENS
Klamath Basin farmers and
ranchers are feeling the pinch of continually
increasing fuel and fertilizer prices.
"The last six months have been the most volatile of
any time that I have known," said Angela Suty,
part-owner of Ezell-Suty Fuel in Klamath Falls.
"Overall it's gone up," Suty
said. "Over the last three to five years it's gone
up about $1 a gallon."
At the pumps Tuesday, retail diesel prices ranged
from $2.29 to $2.59 per gallon in Klamath Falls. For
farmers and ranchers, who pay varying prices for
bulk purchases, a fill-up can range from hundreds to
thousands of gallons.
"It used to be that they could stock up on their
diesel during the winter months when the price was
generally lower and use that fuel into the summer
while the prices went up," Suty said.
Farmers and ranchers have found they can no longer
rely on the advantage of seasonal price swings.
"The price of diesel has not been lower in the
winter," Suty said.
Suty has noticed shifts in the fuel market over the
last four years.
"Things started changing, it
seems like, after Sept. 11. Things got more volatile
and have continued to be," she said.
Increases in diesel prices also have altered
quantities of fuel ranchers and farmers are buying.
Producers are no longer buying diesel in a few large
purchases, but in smaller amounts throughout the
"They're much more cautious when buying because the
price is so volatile," Suty said.
Cattleman and farmer Luther Horsely say the fuel
prices will decrease already slim profit margins on
2,200-acre operation near Midland. Horsely raises
beef cattle and grows small grains such as wheat,
barley and oats, and also grain hay, grass hay and
"I noticed it in just my
employees, in just pickup gas. It's very noticeable
when you see the fuel receipts just for running
employees around," Horsely said.
As fuel prices go up, profit margins for producers
continue to go down.
"With diesel taking such a
jump and fertilizer taking a like percentage, it's
going to reduce the margins that were already thin,"
Increases in fertilizer prices are mainly the result
of climbing natural gas prices. Natural gas is a
major component in manufacturing nitrogen-rich
fertilizer, an essential ingredient for raising
small grains and other crops in the Basin.
"Most commercially made
nitrogen is derived from the reaction between
natural gas, taking the hydrogen out of natural gas
and the nitrogen out of the air. That makes
anhydrous ammonia," said Chris Mowdry, owner of
Basin Fertilizer and Chemicals in Merrill.
"The price of natural gas in North America is
hovering around $6.50 to $7 per million Btu," Mowdry
Over the last five years
Mowdry has seen fertilizer prices almost double.
"We sold ammonium sulfate in 2000 at $132 a ton. Now
it's $227 a ton," he said. "Urea we sold in 2000 at
$228 a ton. This year - $400 a ton."
Suppliers also are being put to the test with higher
fuel prices, which affects their transportation
"The price of fuel is also a contributing factor,"
Mowdry said. "We haul it (fertilizer) from
Sacramento or Stockton. Stockton is the closest
fertilizer plant to us in this area."
Most fertilizer sold through Basin Fertilizer and
Chemicals is manufactured outside of the United
States in order to take advantage of lower natural
"The rest of the world - like in Saudi Arabia or
Venezuela, Trinidad - tend to be warm and don't use
natural gas for heat, cooking or power generation,
and they have a surplus. So with North American
natural gas at $6.50 to $7 per million Btu, these
other places are at $1 to $2, and since this is the
feed stock of the nitrogen fertilizers almost all of
it is now imported," Mowdry said.
"That's putting our American food supply at risk -
just like oil."
In an effort to combat price increases in his
operation, Horsely is looking at ways to maximize
yields from his crops and increase efficiencies in
his operation, an ongoing endeavor for any farmer or
"It's hard to be more efficient when you've been
trying to do that for several years," he said.
Horsely is getting help for improvements through the
Environmental Quality Incentives Program with the
Natural Resources Conservation Service and is
looking at a no-till drill project through the
Klamath Soil and Water Conservation District.
"I've been putting in some more advanced sprinkler
systems with EQIP money," Horsely said. "Which will
make the system more water efficient and help
Horsely also is signed up to use the conservation
district's no-till drill which can help with both
water conservation and fuel reduction.
"That will help with moisture and hopefully a lot of
fuel," he said. We're "doing it on a real small
scale and just trying it out."
Horsely is getting a little help from recent rainy
weather with at least one of his crops, hay and
alfalfa, something he hopes will help offset
increasing fuel and fertilizer prices.
"I've never seen it grow so fast. It's beautiful.
But the rain is putting us back on our planting
schedule," he said. "Hopefully we'll see some better
hay prices this summer that will help make up for