Central Kentucky farmer Brennan Gilkison is spending more on diesel this fall than ever before.
He grows tobacco, hay, corn and soybeans and raises cattle at his farm in Clark and Fayette counties.
During the fall corn harvest, he’s running a combine and two tractors on diesel. But with diesel at more than $6 per gallon, almost double the price this time last year, the combine is burning $600 to $700 worth of fuel each day, Gilkison told WEKU.
“They're very efficient,” Gilkison said. “It seems like they're using a lot, but they're fairly efficient anyways.”
The demand for diesel has been increasing since 2000, but now supply is down due to the wars in Ukraine and Iran. The U.S. war with Iran has prevented crude oil shipments through the Strait of Hormuz, and the war in the Ukraine has destroyed Russian refining facilities.
Traditional fuel prices are up as well, with gas across the Bluegrass State well above $4 per gallon.
Gilkison said there aren't reliable farming equipment alternatives to avoid rising diesel prices. Older equipment might run on gas, but it’s not as efficient, and he doesn’t view battery-powdered alternatives as a sustainable option.
Farming has become increasingly expensive for American producers, who are being hit with rising costs for things like seeds, fertilizer, labor and land.
“It all cuts into the bottom line of…where do we cut back to try to save to help with those extra costs? And that's all across the board and all inputs in agriculture,” Gilkison noted. “Diesel is just the cherry on the topping here.”
In an effort to alleviate the pressure from rising diesel prices, last week Kentucky Agriculture Commissioner Jonathon Shell asked Gov. Andy Beshear to allow farmers to use untaxed diesel on public roads for farm equipment during this fall’s harvest. Some farmers used untaxed diesel, also known as red-dyed or off-road diesel, for things like tractors and combines.
The Kentucky Lantern reports Beshear’s office was reviewing the request as of Thursday.
But Gilkison isn’t sure how much the tweak will actually help farmers.
He said he uses on-road diesel in all of his equipment and works out the taxes at the end of the year. Instead, Gilkison said it would be helpful to change the biofuel standards, so more corn and soybean can be used in ethanol fuel.
“We need to be able to use more of what we grow into what we need,” Gilkison said.
Corn is not hugely profitable for Gilkison’s operation right now. As he described it, they won’t be building a swimming pool with the profits, but there are other parts of his farm that are doing better.
“Cattle are doing decent right now, and tobacco's doing decent, so it might offset the loss on corn and beans, and vice versa in other years,” Gilkison said. “Are we losing money at corn? I don't think so, but…by the time you pay the fuel and rents and labor and equipment expenses and input prices, I'd like to do some other things some days.”
Some are taking different approaches to try and cut costs, like no-till field work.
“We are trying to grow what we grow the cheapest possible way we can, and the best way we can,” Gilkison said.
