Fine-tuning equipment and smart fuel buying pays
Inflation talk has been a distant worry for economists, but it hits home for farmers, who know it is costing more to put the giddyup in their trucks and tractors. Fuel costs have become a serious line item on production budget sheets for some producers, doubling from $35 to $70 per acre. That factors in truck fuel.
Wisconsin data show that farm fuel and oil expenses jumped 133% from 2001–03 to 2008–10, and that doesn’t even capture the huge increases in 2011. No other input has exceeded that increase. Get ready for more of the same.
The U.S. Department of Energy predicts 2012 average diesel prices of $3.91 per gallon, rising to $3.99 for 2013 and $4.49 by 2035. Those are retail costs, including taxes; diesel delivered to the farm is running closer to $3.70 to $3.80.
"I see prices shifting direction and choppy in the short term," says Nick Fischer, vice president of CHS Inc. He sees upward pressure on prices led by many factors, with global economic growth, global political unrest and regional supply shifts continuing to have the biggest impact on market direction. Longer-term, the overall feeling within the diesel market is bullish in terms of demand and higher relative prices.
Be proactive. You don’t have to just sit back and take these sky-high prices. Through tractor and implement fine-tuning, combined with timely and smart fuel buying, you can shave your energy use and costs. "Having adequate fuel storage, such as an 8,000- to 10,000-gal. tank, can cut diesel costs by 15¢ to 20¢ per gallon—even a 2,000-gal. tank can result in savings, due to volume discounts," says Ken Johnson, general manager of Ashby Equity Association in Ashby, Minn.
"Along with volume considerations, fuel choice can also have a significant impact on the customer’s bottom line," Johnson says. Premium diesel technology has changed rapidly and offers a 5% efficiency gain versus traditional diesel fuels.
Farmers can also shave energy costs by making their tractors and other equipment more efficient. Farmers with a conventional tillage system use between 4 gal. and 6 gal. of diesel per acre, while no-till systems use about half that, notes Mark Hanna, an agricultural engineer at Iowa State University. Tilling to a 9" depth with a subsoiler requires 1.7 gal. of diesel, while tilling to twice that depth takes 3 gal. Iowa studies show that yields are often just as good or better by chisel plowing to a level of 6" to 8" rather than using a subsoiler to twice that depth.
Another easy way to shave energy costs is to shift up to a higher gear and back down on the throttle for lighter drawbar operations, such as planting, that don’t require full power. This
can cut fuel costs by 10% to 20%, depending on the tractor and function. Some newer tractors do this electronically.
Read the fine print. Changing tractor fuel and air filters on a regular basis can shave costs by 3% to 4%. Simply inflating tires properly can save 8% to 10% of fuel needs. When buying a new tractor, it’s important to read the fine print on fuel efficiency and take the time to make apples-to-apples comparisons.
Properly matching tractors and implements can cut costs, says Gary Krutz, an agricultural engineer at Purdue University. It could be that your tractor could pull a wider implement. Also, make sure your tractor engines are tuned up.
Other ways to reduce fuel needs are to use wireless communication with GPS systems and to use a grain buggy to bring fuel to a tractor planter. In addition, some chemical companies now offer to put as many as six chemicals in one bag, which can reduce the number of trips with trucks.
"In the future, you’ll be able to communicate with your tractors and say you want to go slower in some parts of fields, but faster in others," Krutz says. "That’s coming."