Hard choices might have to be made if the world faces the prospect of declining petroleum supplies.
“I think it will be more of a choice for society, really,” said Robert Stevenson, a Kenton, Man., farmer who has given some thought to the implications of rising oil prices.
“Either they have supplies of oil for agriculture, or they’ll use it for something else. I don’t think there’s a way to produce food now without energy. We’d have to turn the clock back quite a few years.”
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Stevenson carefully tracks his fuel consumption, recognizing it as an important part of his cost of production.
“I think that farmers will be able to afford it. The price of grain will have to rise to make it feasible to use. I’m not as worried about price as I am about availability,” he said, adding rationing might offer a solution.
“I think fuel right now is just dirt cheap. I don’t see anybody out there cutting back on consumption because of price,” he said.
“People see it as a necessity. They will cut back on everything else first, clothes, or meals out. One of the last things they will do is cut back on their energy consumption and I think that’s coming up against reality.”
Farmers could cut their fuel use in half by applying improved technology and conservation measures, including direct seeding, global positioning systems and auto steer, said Stevenson.
Confirmed through conversations with other like-minded farmers, he figures no-till farming uses about eight litres of diesel per acre, and another three to four litres of purple gas to power grain trucks, augers and the farm pickup.
A tillage-based production system uses 16 to 17 litres of diesel per acre, plus 3.5 litres of gasoline, he added.
While running the combine at harvest uses about two litres per acre, the average farm pickup, which gets four kilometres to the litre or less, is probably the most profligate waster of fuel on Canadian farms, he said.
Used for driving to the field and to town, it accounts for far more consumption than is necessary, he said.
But unless fuel prices triple, he believes most farmers will continue with business as usual.
“Those are the sorts of choices that agriculture will have to make. Are you going to drive your half-ton to town for the mail, or are you going to combine five acres of wheat?”
* Management
David Kohl, an agricultural economics professor from Virginia Tech, said astute management will help farmers weather future oil and input price shocks.
That means taking the time to pencil out every detail of their production system, developing a flexible game plan ahead of spring seeding, and exploiting the efficiencies offered by auto track GPS systems in their operations
Kohl said modern farms are dependent on fossil fuel with $8 of every $10 spent on farm inputs related to oil and natural gas.
Modern, large farmers are adapting to rising energy costs.
“They are doing things like nutrient management and soil testing to fine tune their production practices and tying them to their cash flow,” he said.
“Successful management today is not about doing one thing 1,000 percent better, it’s doing 1,000 things one percent better.”
Kohl, a regular speaker at farm conferences on both sides of the border, tells producers that under the peak oil scenario, oil price swings could become more brutal.
“We used to see a $10 swing in the price of oil. You could see $40 to $60 swings,” he said.
Unless the U.S. or emerging economies such as China fall into a recession, energy prices will be high for the foreseeable future.
He is not convinced that grain prices will continue to soar along with the price of oil forever. If grain prices fall, there may be a lag of 18 to 24 months before input prices readjust downward.
“I’m not a fortune teller, but I can really see that one coming in the next four, five years,” he said. “That creates a liquidity lag, where the costs are up, revenues are down and we get economically pinched. A good manager will be preparing for those times.”
Is there a silver bullet solution for energy costs?
“A lot of people ask me, ‘How did we get ourselves into this situation?’ Basically, we got ourselves addicted to cheap, foreign oil,” he said, adding that a combination of ethanol, biodiesel, wind and solar could offer the solution.
“A lot of small things taken together could offer a cure. But it’ll take a decade to build. It’s something that you can’t change overnight,” he said.
* Agronomy
Martin Entz, professor of cropping systems and agronomy at the University of Manitoba, said the possibility that future energy supplies might not be cheap or plentiful is a major driver of cutting edge agricultural research around the world.
“There’s no question that we are all sleepwalking,” he said.
The implications of declining energy supplies, and the possibility of societal chaos and food shortages, will require creativity and fresh thinking.
“I think we have to find a way to draw people away from their dependency on fossil fuels and allow them a way to not be afraid of the future.”
His research includes reducing or eliminating dependence on nitrogen fertilizer, which is made from natural gas and accounts for almost 50 percent of the energy bill for growing crops. It can be artificially produced from any heat source, including coal, using the Haber-Bosch process, but at a much higher cost, he said.
However, because the air we breathe is 78 percent nitrogen gas, using nitrogen-fixing legumes in crop rotations is by far the cheapest means of boosting soil fertility in terms of energy consumption, he added.
“The tractor going around the field is typically not much more than 12 to 14 percent of the energy budget. People think about fuel, such as diesel for the machines, but there are ways of replacing those. The big ticket item is the nitrogen.”
If an oil supply crunch were to occur, farmers could use oilseed crops to produce biodiesel, but a nutrient squeeze would require greater changes.
In an energy-starved future, feeding non-nitrogen-fixing crops such as corn, barley and wheat to ruminants would have to end.
“We would revolutionize our animal agriculture. We’d have a lot more pastures and the feedlots would feed more alfalfa than now,” he said.
“We could accomplish everything that we do now, we’d just do it very differently.”
* Hi-tech solutions
Fred Topp, a North Dakota farmer who belongs to Growers for Biotechnology, said fertilizer prices already squeeze farmers’ profitability.
Today’s high grain prices help offset the high cost of inputs such as fertilizer, but if grain prices fall and input prices don’t, it would be disastrous.
A breakthrough in research into nitrogen efficient crops that companies such as Monsanto and Pioneer Hi-Bred are developing would be a tremendous help.
“I don’t have enough manpower to put anhydrous on, so I’d really struggle shoveling manure,” he joked.
“If I was a leading genetics manufacturer, holy, if we could just develop that specific (nitrogen efficiency) trait alone.”
Monsanto marketing director Norm Sissons said the plant genetics giant is in the mid stages of developing genetically modified corn and canola varieties that yield 10 to 15 percent higher without increasing the amount of nitrogen applied.
The products, which are making their way through the regulatory process, could be on the market early in the next decade.
In the future, if fertilizer costs soar, the new technology could help farmers maintain profitability, he said.
“Our focus is on agronomic traits in general, things that can help a producer produce more canola more efficiently so they can be more profitable.”
