Gas prices affecting farmers and ranchers, professionally and personally

RAPID CITY, S.D. (KOTA) - Gas prices may have dipped back below the record average of $4.33 earlier this month according to AAA. But they are still pushing $4 here in South Dakota. And it is weighing on the wallets of many. One sector being hit with no way out? Those in agriculture.

When the pandemic began, farmers and ranchers were hit with packing plant and workforce issues.

Then supply chain problems to get parts, feed, and all other supplies.

Now, blockades against Russia and increased gas prices are the latest blow.

“We burn a lot of diesel through putting up hay and a little bit of farming,” said Eric Jennings, a rancher in the Northern Hills. “I filled up my bulk tank in the middle of February and I checked this morning and the price has gone up a dollar and 15 cents per gallon just since I did that a little over a month ago.”

For many industries, an increase in their costs trickles down to the consumer. Jennings says that’s not a reality in agriculture.

Increased fertilizer and chemical prices - which are made with gas by-products - impact their bottom line.

Fertilizer is up 350%.

“It’s very difficult to absorb that,” continued Jennings. “We’re not in an industry that we’re able to pass those extra costs onto a consumer... So we just have to absorb those costs. And I don’t think that anybody budgeted these fuel costs in when they were putting their budgets together at the end of last year.”

When purchasing a new car, good fuel economy is often high on the list of essentials.

For someone like Jennings, he’s looking for power and torque. Two things adding to an increased gas bill.

“So when we buy vehicles, we’re not concerned about fuel mileage, we’re concerned about how much horsepower and how much torque it has,” said Jennings. “So consequently, we end up with vehicles that are very inefficient fuel wise but they’re able to get our work done. So consequently we go through a lot of gallons of fuel. My pickup has a 50-gallon tank and there a few weeks ago, i was able to hit the $200 mark when filling it up in town.”

Working and living in the country also means a long and now costly trip to town.

“When gas prices were a little lower, you get pretty sloppy about not planning your trips out to town as well. When gas prices get high like this, you try to plan out a little bit better. You wait until you have a pretty long list of things before you actually make the trip to town,” continued Jennings. “Hopefully, you can do that, sometimes if something breaks, you need a part right away, if you blow a hydraulic hose on your feeding tractor, you gotta get that fixed right away, so it’s a trip to town immediately.”

Being a farmer or a rancher, it’s been said that “you hope the good years are good enough to get you through the bad ones”.

But with no end in sight for the Russian invasion of Ukraine or decreased gas prices, it could mean closing up shop.

“There’s a lot of people just on the edge, this could really put a lot of people under,” said Jennings. “It could just get to the point where it’s no longer profitable enough to stay in the business and they have to do something else.”