As if this year hasn’t been rough enough on the agriculture community, Oklahoma farmers can now add “global diesel shortage” to their hardship bingo card for the year of 2022.
Just weeks after an executive order was placed by Gov. Stitt to continue drought relief efforts for farmers, reports of what some are calling a devastating diesel shortage are rolling in to accompany farmers into the already harsh winter season.
Tim Heinrich, who serves on the board of directors for the Garfield County Conservation District, and runs a 3,000 acre farm operation of his own in North Central Oklahoma says a modern day combine, like the one he currently uses on his farm for harvest will typically require about 150 gallons of diesel a day to get the job done, a job that in the end, will cost him more in fuel than he’ll get back in sales.
“I’m harvesting soybeans that aren’t even worth harvesting right now,” he said, adding an increase in diesel costs makes every component of every function of his farm more expensive.
“Most of us have diesel pickups that we use to feed cows with all winter long, all the trucks hauling the crops to and from the farm, all of our farm sprayers, our combines and our tractors. All of it is at the mercy of the rising cost of diesel,” he said.
The U.S. Energy Information Agency reports in their November Short Term Energy Outlook that diesel prices are nearly 50% higher than this time last year, and our reserves are at the lowest level since 1951. But how did we get here?
“Demand is returning back to where it was in 2019, and supply is literally producing a million barrels a day less than it was in 2019,” said U.S. Rep. Frank Lucas (R- Cheyenne) former chairman of the House Agriculture Committee.
Lucas said one of the challenges is that since 2019, 5% of the refining capacity we had three years ago to convert oil into diesel no longer exists.
“It’s either been converted to biofuels, it was antiquated older equipment, or it was determined cost effective when demand was down. So we have 5% less refining capacity, but the refineries that are running are working harder than they have in 20 plus years. So as demand goes up, supply is restricted by how much we can grow,” he said.
“You can only get so much diesel out of a barrel of oil. It’s just the nature of it.”
Another challenge, Russia.
“Supply and demand circumstances in the world affect the prices in Oklahoma. Add in the dictator Mr. Putin invading his neighbors and the Ukraine, and Europe and the Western world’s response to stop buying Russian products. That’s also affected things,” Lucas said.
Heinrich, who also serves on the Garber co-cop board, a locally owned farmer cooperative that provides fertilizer, feed, fuel, and chemicals to farmers in the area, said the diesel shortage is impacting other farm products as well.
“We’ve had to cut back on some of our farm chemicals and fertilizers because we just can’t get them. There are so many shortages right now because a lot of these things are manufactured at plants that burn diesel.”
Heinrich said the community is trying to adapt and learn to do more with less, but it’s hard to keep up with this and the rise in inflation.
“All of our input costs have doubled or tripled. We’re the only part of the food chain that cannot control our sales price,” Heinrich said.
Whether it’s a couple thousand acre operation or a couple dozen, farmers all across the state are feeling the pressure of these price increases.
“Farmers are cutting back on everything from farm life, to family life,” Megan Whitehead, who runs a small 30-acre farm with her family out of Kingfisher, Oklahoma, said.
“All the prices have gone up except for what we earn.”
Megan recently had to sell her herd of beef cattle after not being able to afford their hay feed this September. Still recovering from a recent knee surgery, she said she’ll have to put in for extra hours at the hospital she works at to keep their family from having to sell off parts of their land to get through the winter.
“I’m lucky that I can pick up overtime every other week at the hospital, but so many other farming families don’t have that option,” Megan said.
Heinrich said most Oklahoma farmers are operating on borrowed money.
“Almost every farmer out here has a big old loan. The people in town might drive by and they see our equipment and our barns and they think, oh, he’s got it made. But we’re all one hiccup away from losing it. Every one of us is just one hiccup from losing it,” Heinrich said.