Durbin Warns Rising Gas Prices Create Real Hardship for Illinois Farmers

DURBIN WARNS RISING GAS PRICES CREATE REAL HARDSHIP FOR ILLINOIS FARMERS

With fuel costs continuing to rise, U.S. Senator Dick Durbin (D-IL) today said that thousands of Illinois farmers are facing crippling input costs. Durbin joined his Democratic colleagues in calling for immediate relief for consumers, small businesses and farmers.

"Illinois farmers have expressed real concern when every dollar they earn from their land is eaten up by the rising cost of fuel and fertilizer," Durbin said. "When energy prices cut deep into the profits of family farmers, it threatens their survival."

For Illinois farmers struggling to stay profitable, increased fuel prices mean higher costs for operating farm machinery, as well as rising fertilizer and pesticide prices. According to the Illinois Farm Business Farm Management Association and University of Illinois Department of Agricultural and Consumer Economics, Champaign/Urbana, the average Illinois farmer, with a 1,000 acre farm, is paying $24,000 more than he or she did in 2001 to operate a farm. This 25% increase in costs is a direct result of higher gas prices which have led to higher fuel, fertilizer and pesticide costs for farmers across the state. This year's dramatic gasoline price spikes are expected to exacerbate the problem even further.

"Fertilizer is double what it was two years ago and so is diesel. Those prices are just backbreaking. During planting season, our tractors go through hundreds of gallons of diesel a day. Fuel prices used to be a small part of the operating budget and now it's a major part of our budget. We're stretching our necks out there planting this season," said Illinois Farmers Union member, Gordon Stein of St. Elmo, Illinois.

"Illinois farmers are paying more for their diesel fuel and for their fertilizer and some are being forced to sell off land that has belonged to their families for generations. Things have never been easy for small farmers, but the combination of recent droughts, sky-high gas prices and an uncertain commodities market is a perfect storm that threatens the future of American agriculture," Durbin said.

"Whether it's the high cost of gasoline, diesel fuel, or fertilizer, rising fuel and natural gas prices impact every part of our operations, putting a severe strain on farm profitability," said Illinois Farm Bureau President, Philip Nelson.

Durbin noted that while fuel prices have increased, commodity prices have either stayed level or decreased. He said Illinois farmers in 2005 paid an additional $314 million for fuel, fertilizer and pesticides than they did in 2004. However, corn and soybean prices have remained level or even decreased in recent years. On average, in 2001, farmers received $1.97 per bushel for their corn; in 2005, they received $1.90. Soybeans pay more today than they did in 2001, but from 2004 to 2005, farmers received about 25 cents per bushel less for their beans.

"Farmers coping with high energy prices tell me they are unable to purchase new equipment or sign up in advance for seed or fertilizer contracts that will save them money down the road. Equipment dealers and community bankers tell me the same thing. These trends have spillover costs for rural America, as equipment dealers see their sales drop and community bankers see increasing numbers of family farmers filing for bankruptcy and leaving the farm," Durbin said.

"The Republican leadership in Congress has proposed a $100 rebate to help Americans through this energy crisis. I respect Illinois farm families too much to suggest this is a serious response to a real crisis," Durbin concluded.

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