Record fertiliser and glyphosate herbicide prices have grabbed the spotlight this season, but diesel is the third big hitter in what is becoming a year of exceptionally high-cost inputs for farmers.
Bowser prices for diesel have hit record levels of about $1.70 a litre, with on-farm fuel prices also at all-time highs, even after deductions such as the 38 cents a litre tax rebate are taken out.
Boyce Chartered Accountants director, Paul Fisher, Moree, said the worry was that while wheat prices had been at record highs of more than $400 a tonne, history showed they were like a rollercoaster and, at some point, would go down.
"The issue is that if input prices remain up at $14/L for glyphosate, $600 a tonne for fertiliser and $1.70/L for fuel, farmers are out of business if the wheat price drops back to a normal 10-year average of about $180/t," he said.
"If the wheat price is at a new, average level of, say, $280/t for the next 10 years that might be okay, but if it finds its way back to where it has been there is a lot of concern in the industry."
Agri-Path Services consultant, Simon Fritsch, Tamworth, said until two years ago the diesel component of a typical North West no-till winter cropping budget was about $25 a hectare.
Today, it was more like $35 to $40/ha.
"Chemical, fertiliser and diesel, in combination, have probably added nearly $100 a hectare to the cost of farming," he said.
NSW Farmers Association business, economics and trade committee chairman, Tom Smith, Inverell, said high diesel prices were having a "horrendous" effect on farming's bottom line.
"It's a cost we didn't need at the moment," he said.
"It is a shame fuel, chemical and fertiliser prices went up just when commodity prices were starting to show a benefit and agriculture could start to recover if it rains.
"If people go and spend their money on inputs and then don't get a crop, they are going to be further behind again.
"And it is not only the farming industry that is copping it; for the livestock people there is a fuel surcharge on transport as well."
Mr Smith said behind the high prices was an increase in worldwide demand for diesel at the same time as refining capacity was being limited because priority was given to petrol.
"Prices for diesel are not likely to drop in the short term because world refining capacity is flat-chat and that seems to be where the bottleneck is," he said.
NSW Department of Primary Industries economist, Fiona Scott, Tamworth, said one upside was the advent of conservation farming practices had reduced diesel consumption and costs a hectare compared with conventional regimes.
"With zero-till there is a lot lower fuel use per hectare," she said.
*Extract from an article in this week's The Land, Thursday, May 29.
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