| Posted April 21, 2005:
With US refineries running at full capacity, the recent Texas
refinery explosion could put additional pressure on US gasoline
and diesel prices for an indefinite period of time. This potential
disruption in US supplies of fuel takes place just as refineries
are ramping up supplies to meet the needs of the summer driving
season. As spring arrives, agriculture's demand for fuel also
increases dramatically. The degree to which this explosion will
have an impact on US prices will depend on the severity of the
damage and the extent of the impact on the refinery's productive
capacity.
In last week's column we looked ahead to the coming season
and the potential impact that higher energy prices will have
on farmers in the short-term. Those include lower margins
and lower profitability, pressuring farmers to get the most
out of each tank of fuel that they put into their equipment.
While facing higher fuel prices, the appearance of Asian Soybean
Rust has the potential to put farmers in a no-win situation.
Will the additional cost of spraying be less than the potential
loss from the disease? Considering the tight margins, a miscalculation
could have serious consequences.
At a time when we are looking at the potential impact of
higher energy prices on this year's US agricultural production,
we thought it would be interesting to take a moment to look
at the transformation that was triggered by the introduction
of farming equipment that ran on inexpensive fossil fuel supplies.
This transformation began more than a century ago with the
advent of the huge steam traction engines. Over time, these
behemoths slowly gave way to the smaller, more adaptable tractors
that became a symbol of mechanized US agriculture. In recent
years, the smaller tractors have begun to give way to larger,
articulated, four-wheel-drive machines that are as large as
the steam traction engines of an earlier day.
This introduction of mechanical power onto the farm triggered
a slow but steady decline in the use of draft animals. Today,
with the exception of the Amish and similar groups, the major
use of these animals is limited to ceremonial occasions and
county fairs. The acreage that was used to grow the feed that
was fed to the animals that powered US farms has, for the
most part, been converted to the production of food crops.
In 1900, the production of oats required over 30 million acres.
Today oats are grown on less than 2 million acres. One of
the results of the introduction of fossil-fuel-powered equipment
onto US farms has been the conversion of a significant number
of acres from energy production to food production.
Using fossil fuels to provide the power that runs the modern
farm has, in large part, also been responsible for the thinning
out of farm neighborhoods. Purchasing a tractor meant that
a farmer could work more ground in a day than he had been
able to cover in a week with his Belgians. Farm size was no
longer determined by the physical limitations of animal agriculture.
To use their new equipment efficiently, farmers began to rent
and/or purchase land from their neighbors. Many of these neighbors
then moved out, going to work in the factories that were sprouting
up in places like Detroit and Moline. The increased use of
fossil fuels brought with it the substitution of mechanical
power for human power.
One could even argue that the specialization that is seen
on today's farms is a consequence of the revolution that was
brought on by introduction of fossil fuels into US agriculture.
As long as one had to put up with sometimes-cantankerous horses
and mules, one might as well have cattle, sheep, and hogs.
But, with horses no longer necessary, some farmers were more
than happy to get rid of all livestock. The hassles of dealing
with livestock, along with the increased efficiencies scale,
resulted in a significant number of farmers concentrating
their efforts exclusively on grain production while their
neighbors began to raise larger and larger numbers of food
animals.
The fossil fuel driven revolution in US agriculture brought
with it an increasing dependence upon purchased inputs. The
energy that once came from the back forty, now comes in a
bulk fuel truck. Without the manure provided by animals, crop
farmers purchase their fertilizer from their local cooperative,
fertilizer dealer, or elevator. Where once the farmer bred
his mare to replace an old piece of "power equipment,"
he now goes to town and to purchase a new tractor.
Will increasing fuel prices drive a revolution as significant
as the one that transformed US agriculture over the last century?
From this vantage point, it is hard to see what that revolution
would look like. On the other hand, in 1900 it would have
been difficult to predict the agricultural changes that took
place during the twentieth century.
Daryll E. Ray holds the Blasingame Chair of Excellence
in Agricultural Policy, Institute of Agriculture, University
of Tennessee, and is the Director of UT's Agricultural Policy
Analysis Center (APAC). (865) 974-7407; Fax: (865) 974-7298;
dray@utk.edu; http://www.agpolicy.org.
Daryll Ray's column is written with the research and assistance
of Harwood D. Schaffer, Research Associate with APAC.
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