Conflict in the Middle East may mean bad news for North Dakota farmersThe recent conflict in the Middle East not only has driven up gas prices but may cause commodity prices to drop which could mean bad news for farmers.
The recent conflict in the Middle East not only has driven up gas prices but may cause commodity prices to drop which could mean bad news for farmers.
As of Friday the average in the state for regular gasoline was $3.47 and Diesel was $3.82, according to Gasbuddy.com.
Fuel prices affect farmers in a variety of ways, besides an increased cost to run equipment, the cost to transport goods would also increase.
“Higher gas prices cut your income down a lot,” said Gladstone farmer Tex Appledoorn. “As a farmer you use a lot of fuel to make your crops grow and get them to market.”
Appledoorn said farmers get hit with fuel prices several times.
“Spring planting, spraying applications, harvesting and trucking the commodities to market are some of the times farmers really get hit with fuel bills,” Appledoorn said.
The major reason for the increase is due to the violence in the Middle East, Senior Petroleum Analyst for Gasbuddy.com Patrick DeHaan said.
DeHaan predicts another 5 cent increase next week.
“It’s almost certain that gas prices will continue to rise especially as we approach summer,” DeHaan said. “I fear that if the situation in the Middle East does not stabilize things could get much worse.”
One of those “things” that could get much worse is the price farmers will get for their grain.
“One concern with the conflict in the Middle East is that military action could cause trade flows to be disrupted,” said Frayne Olson,
extension crop economist for North Dakota State University. “The situation would have to get much worse before that would happen, but the fear is that some ports may close down or shipments may be cancelled.”
Disrupted trade flows could affect Americans because countries in the Middle East and North Africa are some of America’s biggest buyers of Hard Red Winter and Durum wheat, said Jim Peterson, marketing director for the North Dakota Wheat Commission. Peterson said if trade flow was disrupted that could have a ripple effect on North Dakota wheat growers.
“Right now prices are really good because of the demand,” Peterson said. “With the draught in Russia, some countries such as those in the Black Sea region, have turned to America for their supply — I hope we don’t see any hiccups in that trend.”