Listen closely; that rat-a-tat-tat you hear are the buttons on calculators being tapped as farmers put the pencil to how this year’s financials shaped up, and figuring the numbers on what, where, how much — and even if — to plant in 2006.

Rising input costs are the issue in farm country this off-season. Farmers are faced with skyrocketing prices for two of their critical highvolume inputs in the wake of the Gulf Coast hurricanes and other energy market pressures. First, fertilizer costs have gone up by double digits. And, second, for the first time since the Great Depression, a gallon of diesel fuel is more expensive than a bushel of wheat.

Farmers face this situation uniquely because, unlike any other participant in the food chain, they have no ability to pass along these costs in the form of surcharges. In fact, they pay everybody else’s fuel surcharges in addition to their own increased costs.

As the saying goes, farmers buy retail, sell wholesale — and pay the freight both ways. And rising costs are making that challenge a whole lot harder.

Dale Schuler, Carter, Mont., one of the grower leaders of the National Association of Wheat Growers, estimates that fuel and fertilizer costs are 52 percent higher in 2005 than the 10-year average. His peracre fuel and fertilizer costs have averaged $31.02 over the past 10 years, but have exceeded that in each of the past three years.

Hallock, Minn., farmer Ron Anderson, a former president of the Minnesota Association of Wheat Growers, estimates that his diesel fuel costs have increased 54 percent since 2004. Higher diesel means it now costs about 12 percent more per hour to run a tractor than it did last December, according to Bill Lazarus, University of Minnesota extension economist.

Paul Johnson, a MAWG board member also from Hallock, points out that the higher energy costs affect other sides of the farm business, too, such as custom application costs, which have gone up because of the increase in fuel prices. And this fall a fuel surcharge was added to railroad freight rates, which affect the prices that local elevators can pay producers.

An average northwest Minnesota spring wheat farmer will realize a $22 per acre increase in production costs from climbing fuel, fertilizer and chemical prices, according to estimates using the Northland Community College Farm Business Management farm financial information. These costs represent 115 percent of the five-year average net income from wheat production, resulting in a $3 per acre loss.

“Fertilizer costs have gone up significantly, and that’s really going to impact the bottom line of the farmers more directly than the cost of the fuel that’s put in the tank,” says Jim Kurtz of the U of M Worthington Extension Regional Center. Anhydrous ammonia, which is used as nitrogen fertilizer, has soared to over $500 per ton in comparison with $385 last year. Urea, a granular form of nitrogen fertilizer, is over $300 per ton today, while it sold for around $248 per ton last year.

Meanwhile, cash prices for wheat this fall are mired in the $3 per bushel range, soybeans in the $5 range and corn around $1.50.

The NAWG has been lobbying for federal farm energy assistance, but that will be a tall order, given the federal budget situation and the political can of worms that would come with assisting one business sector and not others. The energy situation could bolster the case for income support in the next farm bill, however.

Good cattle prices offer some saving grace, as do exceptional row crop yields this past year in the Northern Plains. But the fact remains that rising energy and input costs have emerged to become the greatest challenge to the viability of production agriculture, and there will be lasting changes, resulting in trends that don’t necessarily have to be all negative.

For example, more R&D on renewable fuels may lead to better opportunities to produce crops for the renewable fuels market. Maybe the issue will lead to R&D on better fertility practices and more nutrient- efficient crops (nitrogen-fixing corn and wheat?). That could lead to greater adoption of precision farming practices and more efficient farm machinery use. Just as commuters car pool to save on travel costs, perhaps farmers will do more pooling of resources in the future.

Perhaps the energy situation may prompt groups of growers, cooperatives or ag companies to form direct purchase agreements for inputs, or invest in fertilizer/ input manufacturing plants overseas. In Europe, and even in some instances in the U.S., farms are generating their own energy. So perhaps farms someday will have their own “stills” to turn grain they produce into fuel, right on the farm.

All speculative thinking, to be sure, but nothing outside the realm of possibility either.