Inflation hitting farmers

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LIME CITY – The driveway to Tom Schaller’s farm in Perrysburg Township was filled with more than 22 pickup trucks representing local farmers concerned with how inflation is affecting their businesses.

They met Monday with state Sen. Theresa Gavarone, R-Bowling Green, to talk about inflation and its impact on farms and future food prices.

“Obviously, everything has gone up,” said Josh Kieffer, of Luckey Farmers in Woodville. “We’re already seeing increases of 30% to 40% of production (costs). Right now, in-house, for next year, they’re at zero profits.”

Luckey Farmers is an agricultural cooperative that provides products and information about grain marketing, plant food, seed, feed, general farm supplies and petroleum products.

“We had all sorts of people from our farming industry, from our banks and lenders, to equipment suppliers and even our county auditor,“Gavarone said. “The farmers in the room were explaining the cost of everything that they need to run a farm, including the lack of availability in equipment, transporting the product and the costs of the chemicals and fertilizer. All the things that go into farming have gone up exorbitantly.

“It’s unfathomable when you think of how that’s going to impact, not just our farmers, but the cost of everything. People are struggling to make ends meet and fill up their tank with gas. When you think of how this is going to hit our grocery stores, it’s a real challenge,” Gavarone said.

Kirk Wensink is an agricultural lender with Farmers and Merchants State Bank and a farmer in Custar.

“The biggest issue right now is guys are getting ready to plant their spring planting, so parts and stuff like that are on a farmer’s mind, and getting products, along with seed and chemistry. There’s going to be things where guys are going to have to alter their chemistry and fertilizer. Roundup and Liberty is especially tight,” Wensink said. “We’re probably in uncharted times. It’s the threat of not being able to get product.”

He said that has never been an issue during his time in farming and it’s being reflected in lending.

“There’s farmers that are getting operating lines and some are increasing their current operating lines, so they can borrow more if they need to, but most of that is for next year. They are already thinking about 2023, because they know there is probably, definitely, going to be product shortage,” Wensink said.

Kieffer gave a number of industry statistics.

He said that there has been a 74% increase in the costs of chemistry inputs. That is generally defined in farming as the costs of things like weed killers.

Roundup has gone up 208% since last year and Liberty is unknown, because there’s only an estimated 50% availability.

“I just talked to a farmer in my district who had some delivered. It’s like gold. They just can’t get it anywhere,” Gavarone said.

Kieffer added that there has been an 81% increase in the price of fertilizers.

Farmers have asked Gavarone for a number of things, but an exemption on fuel and trucking prices are at the top of the list. There’s a shortage of certified truckers right now. There was broad consensus in the room that the taxes, fees and training costs for truckers are all passed on to the consumer.

There has been a 73% increase in the cost of off-road fuel, from one year ago. That is the tax-free diesel fuel used for agricultural purposes.

“To farm 400 acres of soybeans, you’ve got an increase of $3,200 in one year,” Kieffer said.

The supply chain issues are affecting more than farm inputs, like gas and logistics.

“We’re asking our farmers to plan ahead more than ever before,” said Derek Hetrick, of Redline Equipment in Portage. “Our main factor is that we’re running out of certain components.”

Hetrick is a dealer in farm equipment, selling tractors, combines and all the other large equipment used in the business. Many of those large vehicles are now taking more than a year to ship to the dealer.

Much like the auto industry, there is a chip shortage. But it’s more extensive, because farm machinery has more parts than a car or truck. He’s also having difficulties getting wiring harnesses, tires and small engines. Much of those pieces are manufactured overseas.

“You could be really out of luck if you can’t get it serviced and you can’t get something new,” Gavarone said.

When the parts are available, the prices have gone up. That has also driven up the price of both new and used farm implements.

Joe Schaller, trustee with Perrysburg township, put the broader issue into perspective.

“We are seeing the same kind of thing at the township level with police cars and ambulances,” Schaller said. “With the supply chain, the way it’s going, we shouldn’t need a new ambulance for a year, or a year and a half, but we are putting together a bid on one right now. The same thing with police cars. There’s really only one dealer, in Indiana, that’s dealing in them right now. So we’ve had to step up our program and order all those ahead of time.”

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