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Rising fuel surcharges weigh on farmer basis levels

Rising fuel prices are impacting farmers beyond paying more to fill up machinery.

Mike Steenhoek with the Soy Transportation Coalition says the current state of gasoline and diesel costs influence the broad economy.

“Particularly on diesel prices, there are so many different ways it can also seep into individual industries including soybean and grain farmers. And one of them is the whole area of fuel surcharges.”

He tells Brownfield surcharges in the rail industry are up 150 to more than 300 percent over the past year and the additional cost is being disproportionately passed on to the farmer in the form of weaker basis levels.

“So when you look at these fuel surcharge increases, you can’t just assume well that’s going to be the grain handlers’ problem, the soybean processors’ problem, that’s not going to be the farmers’ problem. Well it actually is the farmers’ problem, and it’s one more way that the increased cost of fuel is going to intrude on farmer profitability.

Steenhoek says the Coalition has found that whenever there’s an increase in transportation costs, it correlates with farmers being offered a lower price per bushel.