WASHINGTON—The petroleum-based plastic bags used to package Virginia-grown potatoes cost David Hickman 12 cents each in 2020. That price jumped to 16 cents in 2022.
In the face of ongoing energy price hikes, a 4-cent increase per bag seems insignificant.
“But if you buy a half million of these, there’s a $20,000 increase just in packaging costs,” explained Hickman, who represents Eastern Shore and Hampton Roads farmers on the Virginia Farm Bureau Federation board of directors.
He described the strain farmers are experiencing as the world grapples with sharp price increases for fuel, fertilizer, electricity, shipping rates and truck shortages. On Jan. 10, the U.S. House of Representatives Committee on Energy and Commerce heard testimony from him and other stakeholders in impacted sectors.
“We have an opportunity with this Congress to address what American families and businesses are suffering from: Some of the highest energy prices we’ve seen in decades,” said Rep. Cathy McMorris Rodgers, committee chair. “My colleagues want to hear from people on the front lines.”
Hickman, who also grows green beans, soybeans, and corn on Dublin Farms in Accomack County, said, “Last year had the most devastating input cost increases I have seen.”
Diesel fuel escalated 186% to $5.24 a gallon. The farm’s irrigation pumps run 24 hours a day, burning 5 to 7 gallons per hour. Large tractors operate about 12 hours per day, burning 10 to 14 gallons each.
“And all of our trucks burn diesel,” Hickman said. .
Liquid propane used for drying grains went up 55%, he reported. Trucking rates, agricultural chemicals, and equipment costs surged too.
“And while fuel increases were staggering, fertilizer prices and availability were far worse,” Hickman said. “Overall fertilizer costs for 2022 were 225% higher than 2021. We’re at the mercy of foreign countries for fertilizer supply.”
The East Coast’s supply of liquid nitrogen for fertilizer—20% of U.S. usage—was imported from Russia and Belarus prior to the Ukraine invasion, Hickman said. The sudden supply drop drove the price from $227 to $647 a ton. While farmers can reduce fertilizer inputs, he said that results in lower yields and will drive food prices even higher.
Lawmakers asked how they can help.
“We need a strong domestic supply—producing it in this country and not being subject to other countries who are not our friends to import the fuel,” Hickman said. Liquid nitrogen is made from natural gas and is manufactured in Texas, Oklahoma, and Louisiana near natural gas wells.
“We have the supply here,” Hickman said. “All we have to do is harvest it.”