Havre Daily News
Havre wheat producer Murdy Rismon, 55, had a good crop for 2005, but it really hasn't mattered.
Higher fertilizer and fuel prices have made him think twice about taking on the expense of replacing his aging tractor. And like a lot of other farmers, he's standing in line at the local elevator waiting for his grain to be shipped to market so he can pay off his operating loan.
The experience of Rismon, who's farmed winter and spring wheat north of Havre for 27 years, is like that of many area farmers. Last year he spent about $1.50 per gallon on average for diesel fuel. That's up to $2.65 this year. Fertilizer is up too, from $18 per acre to $22 per acre.
Fertilizer and fuel are the two major expenses that have left producers scrimping, even though 2005 brought a decent crop. Worsening their predicament is the shortage of railroad cars to move their grain, they said.
“I guess that means less money to live on the next year,” said Wade Rigg, 46, who began farming in the Havre area three years ago.
Local bankers say they're already seeing the effects higher prices for fuel and fertilizer are having on area producers.
“The increase has definitely reduced their profitability, and that will cause some conservatism on their part to make sure they won't overspend on what their crop brings in,” Wells Fargo ag lender Powell Becker said.
Mike Croston of Independence Bank agreed. He said he's is working with producers to budget for a possible increase in fuel and fertilizer.
“It's going to cut into the guys that have extra money this year. They're going to be kind of leery about investing money for a new truck orcombine,” Croston said. “Farming is a high-risk business. They can't control the input prices and they can't control the output prices.”
Though rainfall can vary greatly depending on the farm's location, overall, area farmers had a pretty good crop, they said.
“It has for the most part been a good crop this year,” Becker said. “The winter wheat crop was average to above average, and spring wheat and barley were average.”
Rigg and Rismon were pleased with their harvests.
“(The crop) was a lot better. This was one of the better years we've had due to timely rains,” Rigg said. “It hailed last year, so that ruined some crops.”
“I had a great crop this year because of having the rain at the right time,” Rismon said.
Delays in moving grain have kept farmers from coming in to get new operating loans.
Croston said he doesn't expect the majority of producers to renew their operating loans until at least the end of November, and then some.
“So right now they're getting extensions on operating to get to February because they would normally start their '06 operating money by now,” Croston said.
“Most of them have contracted a little bit, but they haven't delivered on it,” he said. “But right now the guys are having a hard time delivering their wheat to the elevators. The elevators are a bit slow. They've been getting filled up. They haven't been able to get enough trains in and then get that wheat out,” he said.
Rismon has been waiting for two weeks to haul 3,000 bushels of spring wheat to Archer Daniels Midland-Cenex Harvest States in Havre. He couldn't haul grain when the elevator had space, he said, and after that the elevator was full.
BNSF spokesman Gus Melonas in Seattle said BNSF is working to provide more rail cars.
“The heavy volumes of Montana ag product moving across BNSF's Hi-Line is evidence of our commitment to this important market,” Melonas said.
“As a component of the supply chain, BNSF is maximizing transportation movement of Montana ag products for export at port facilities - where in some cases, the elevators are at capacity. With strong demand, there are some situations where there is more grain than the market can absorb,” he added.
He said the railroad is adding 3,000 grain cars to the ag fleet.