“For instance, this load of square bales that came out of Nebraska, some three by three bales, recently this farmer I’m buying this hay from to re-process, he’s added a fuel surcharge on his delivery fee. His freight was already on the high side, but he told me it was getting in his hip pocket, that he’d have to pass on the increase in fuel costs just on the transportation.”
Randy Britten is a local hay farmer, and he explained that freight costs aren’t the only increases brought on by the high price of fuel.
“About 75% of the cost of a ton of fertilizer comes from actual fuel processing to produce that ton of fertilizer.”
“Fuel costs are probably 25% to 35% higher than they were a year ago. Fertilizer costs are about the same, probably about a 25% increase in our fertilizer input costs. Our wire and our string costs are up again. There’s probably another 10% to 12% increase in those products as far as what we need to produce and bale our hay.”
The more hay a farmer grows, the farther he can spread his input costs among the bales that are produced.
“It’s really going to depend on weather conditions, how that’s going elate into dividing it our per unit in the field.”
With no hay reserves and no reduction in the price of a barrel of oil, the one input that can help both the hay farmer and the hay buyer is from mother nature…rain to grow the grass.