News Release
August 5, 2008

New UW bulletin helps producers assess the impact of fuel prices on crop profitability

Gasoline and diesel prices were starting to rise when a University of Wyoming College of Agriculture faculty member and graduate student began conducting analyses to assess the impact of fuel prices on crop profitability in Wyoming.

Professor Jim Jacobs and Sara Skalsky of Powell, who earned a master’s degree in agricultural economics in 2006, thought their information would help producers better manage their operations as fuel prices inched up. What they didn’t know was just how fast those prices would climb.

“The impact is now greater than when we started this project, that’s for sure,” said Jacobs, a professor in the Department of Agricultural and Applied Economics. “I would think the spreadsheets would be that much more valuable today.”

Skalsky added, “Fuel and fertilizer prices have skyrocketed, and we hope these spreadsheets help producers determine what crops might be most profitable for them.”

The spreadsheets in B-1192, Impact of Increased Fuel Prices on Profitability of Selected Crops in Big Horn Basin of Wyoming, are available on the UW Cooperative Extension Service Web site at http://ces.uwyo.edu/b-1192.asp.

Jacobs said the bulletin is designed to help producers evaluate the impact of fuel and nitrogen fertilizer prices on the cost of individual field operations and the profitability of selected crops. This is accomplished through a series of 14 spreadsheets.

Jacobs and Skalsky based their research on 2002 figures for crop and fuel prices, harvesting costs and the price of nitrogen fertilizer.

As an example of how operating costs have increased in Wyoming, gasoline averaged $1.39 per gallon in 2002 while diesel was $1.15; today, they are approximately $4 and $4.60, respectively.

“With the Fuel Impact spreadsheet, producers can look at how fuel price increases impact the cost of individual field operations,” Jacobs said. “This will also help custom operators determine what their rates should be.”

Simply insert today’s fuel prices into the Fuel Impact spreadsheet. The corresponding increase in per-acre cost of the field operations is automatically estimated, and each base crop budget is increased accordingly, Jacobs said.

Other spreadsheets provide budgets for selected crops including alfalfa, barley, corn for grain or silage, ryegrass and ryegrass seed, dry beans and sugar beets.

“These budgets can be used to evaluate the profitability of individual crops,” Jacobs said.

The final spreadsheet can be used to estimate the optimum level of nitrogen fertilizer and corresponding yield for malt barley, dry beans, sugar beets and corn silage. This is done by entering the price of nitrogen per pound, the crop price and harvest cost per unit in the appropriate column.

Persons with questions can contact the Department of Agricultural and Applied Economics at (307) 766-2386.

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Contact: Robert Waggener, Editor
Phone: (307) 766-3571
E-mail: robertw@uwyo.edu

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