Fuel prices have settled down a little bit since their record highs in the middle of last summer, but farmers are just now tallying up the damage. The first half of a Stockton Record story about the impact of the fuel price surge focused on producers of processing tomatoes. Tomato farmers typically negotiate a fixed price for their crop in late winter to help them secure loans and make planting plans, according to the Record's story. Tomato farmers won a record cannery price of $70 a ton in January, up $7 a ton from the year before.
"When the contract price was negotiated, everybody felt pretty good about it," the story quoted UC Cooperative Extension farm advisor Brenna Aegerter. "It seems like ... in retrospect, they probably should have held out for more."
The article said that UCCE cost studies found that total cash costs for producing an acre of processing tomatoes rose to $2,440 this year, an increase of more than $300 from 2007 mostly due to higher fertilizer and fuel costs.
The increasing fuel costs pushed up the price of all inputs related to petroleum, such as diesel, tractor tires, oil and fertilizer. The story said farmer Joe Ratto was satisfied when the $70 a ton contract price was settled, but the rising costs slice deep into that return.
"If we don't get a real decent yield, ... we're going to lose money," Ratto was quoted.
The Stockton Record story also appeared on Macro World Investor.