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Direct Farm Fuel Expenses, Results from a Large Farm Survey

Robert W. DubmanSurvey and Data Coordinator

USDA/Economic Research Service

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Which farms are most vulnerable from rising prices

of fuels? • Direct immediate impact• Excludes effects on fertilizer

expenses or other inputs• Excludes product price changes• Assumes farmers may be

purchasing in bulk or from cooperatives

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USDA’s Agricultural Resource Management

Survey (ARMS)• Roughly 10,000 samples

annually• Phase III

–Collects farm financial data–Produces Income statements, balance sheets, and measures of financial performance

–Personally enumerated

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Details asked in most years Gasoline Diesel Natural gas LP gas Other fuels Electricity

Questions on whole farm fuel expenses asked annually

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All purchased fuels/total cash expenses

0.0000 0.0100 0.0200 0.0300 0.0400 0.0500 0.0600

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Since 1991, about 5 cents of every dollar of cash expenses went to purchased fuels (gas, diesel, natural gas, LP gas, lubes, and other fuels)

Source: 1991 to 2002 ARMS/FCRS

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Diesel fuel appears to have gained favor. In 2000-2002 average diesel expenses were twice average gasoline expenses

Source: 1991 to 2002 ARMS/FCRS

0

500

1,000

1,500

2,000

1991 1992 1993 1994 1995 1997 1998 2000 2001 2002

  Gasoline/gasohol    Diesel 

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Region/StateSize of operation

Major commodity producedFarm operator typology

Survey can categorize farms many ways

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•In 2002, average diesel expenses were highest in Northern Plains.

•Average gasoline expenses were highest in the mountain region

0

500

1,000

1,500

2,000

2,500

3,000

3,500

  Gasoline/gasohol 

  Diesel 

Source: 2002 ARMS

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0.0000 0.0050 0.0100 0.0150 0.0200 0.0250 0.0300 0.0350 0.0400 0.0450

  Gasoline/total cash expenses

  Diesel/total cash expenses

• Gasoline as part of total cash expenses was highest for farms in the Delta region

•Diesel as part of total cash expenses was highest for farms in the Southern Plains

Source: 2002 ARMS

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Larger farms, based on sales, spent more on diesel fuel than gasoline in 2002

0

5,000

10,000

15,000

20,000

25,000

Less than$10,000

$10,000 -$49,999

$50,000 -$99,999

$100,000 -$249,999

$250,000 -$499,999

$500,000 -$999,999

$1,000,000 ormore

All

  Gasoline/gasohol    Diesel 

Source: 2002 ARMS

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•Diesel and gasoline expenses as a percentage of total cash expenses are lower for the larger farms

0.0000

0.0050

0.0100

0.0150

0.0200

0.0250

0.0300

0.0350

Less than$10,000

$10,000 -$49,999

$50,000 -$99,999

$100,000 -$249,999

$250,000 -$499,999

$500,000 -$999,999

$1,000,000 ormore

All

  Gasoline/total cash expenses   Diesel/total cash expenses

Source: 2002 ARMS

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Rice, Cotton, Peanut, Vegetable, and Dairy farms had the highest average diesel and gasoline expenses

0 2,000 4,000 6,000 8,000

10,000 12,000 14,000

Gene

ral

cash

grain

Whe

at

Corn

Soyb

ean Rice

Toba

cco

Cotto

n

Pean

ut

Gene

ral

crop

Fruit

s and

tree n

uts

Vege

tables

Nurse

ry an

dgr

eenh

ouse

Beef

cattle

Hogs

Poult

ry

Dairy

Gene

ral

lives

tock

  Gasoline/gasohol    Diesel 

Source: 2002 ARMS

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•Rice, wheat, peanuts, and soybeans specialized farms have the highest proportion of diesel expenses to total cash expenses

•On average, specialized crop farms show higher diesel and gasoline expenses compared to total cash expenses

0.0000 0.0100 0.0200 0.0300 0.0400 0.0500 0.0600

Gen

eral

cash

gra

in

Whe

at

Corn

Soyb

ean Rice

Toba

cco

Cotto

n

Pean

ut

Gen

eral

crop

Frui

ts a

ndtre

e nu

ts

Vege

tabl

es

Nurs

ery

and

gree

nhou

se

Beef

cat

tle

Hogs

Poul

try

Dairy

Gen

eral

lives

tock

  Gasoline/total cash expenses   Diesel/total cash expenses

Source: 2002 ARMS

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• USDA’s Agricultural Resource Management Survey has a wealth of data on farm fuel expenses. Much more than can summarized in a presentation. Multiple years, more breakdowns of fuel types, different categories, and links to the financial performance of the farm operations are available.

• Expenses can be translated into physical units and into BTUs.

• Please contact me at ERS if this data could help your research.