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Farmers face tough choices as high diesel prices cut into their bottom lines

Farmers face tough choices as high diesel prices cut into their bottom lines
Posted at 8:48 PM, Mar 16, 2022
and last updated 2022-03-16 23:28:32-04

CORPUS CHRISTI, Texas — Stanley Schilling has been in the agriculture business in the Coastal Bend for the better part of six decades.

He's seen lots of changes, but one need has remained constant to keep his operation running.

“Lots of hours of diesel," Schilling said of the fuel that powers his business' equipment.

He's primarily a rancher, but he does plant, grow, and harvest hay to feed his cattle which requires the use of tractors and other machines. And then there are the diesel trucks he uses to drive around pastures checking on cows and their calves.

Schilling says those uses of fuel are unavoidable.

"All you can do is manage it a little more efficiently — drive a little slower — because you basically got to be there,” he said.

Fellow ranchers and local farmers have brought their concerns to the Texas A&M Agrilife Extension Office in Robstown.

The new extension agent there has only been on the job for a couple of weeks, but he understands what they're going through.

"Farmers are paying double that to fill up their tractors, their 75 gallon fuel tank," Jaime Lopez said. "It doubled in price (from last year to this year). You can imagine what that’s costing them right now to fill — every time they fill up.”

He estimates that paying for diesel only accounts for one-percent of a farmer's total costs, but Lopez says the profit margins on their crops are so narrow, that's actually a significant figure.

“Not only are they using fuel at this time to plant, they’ll be using it at harvest," he said. "And they’ll be using that fuel again to get their product to market."

Schilling is trying to figure out how to keep operating his 11 sections of land while absorbing the impact of high diesel prices.

He says one way to save money is to rework loans so the agriculture machines can keep running.

“You take your short term (loan) and re-amortize it when and where possible to longer term, because you’ve got to have the fuel," Schilling said.