08/10/06 Shutting Down the Oilfield

Shutting down the oilfield. I'm Greg Martin with today's Northwest Report. BP`s decision to shut down the Prudhoe Bay oil field is another unwelcome development on the ag energy front - adding new pressures to the price of crude oil. USDA Chief Economist Keith Collins says he hasn`t run the numbers yet - but the indefinite closure of the Prudhoe Bay facility - due to severe corrosion in an oil transit line - will affect eight-percent of U.S. production - or nearly three-percent of daily U.S. supply. Collins says USDA will have new ag input numbers later this month. But he says recent calculations haven`t been good. COLLINS: Fertilizer plus fuel & lube, plus electricity. Those three components alone, farmers would spend about 30 billion dollars and that's up from 20 billion in 2003. A 50% increase. And despite it all - Collins says the industry - is still profitable overall. Although he says that`s taken the work of producers using innovative tools to conserve on fuel, fertilizer and chemicals. COLLINS: There is variability, volatility in energy markets. You can buy when the market is down, you can store energy. For some producers on the farm you can try and hedge, buy forward such as fertilizer if you can find suppliers that will allow you to buy forward. Not every producer can find that. There are lots of technology innovations that can be implemented. Now with today's Food Forethought, here's Susan Allen. The older I get the more I don't like it hot. This last heat wave also took a lot out of my horses. Despite providing shade and the respite of a garden hose shower a couple days of 108 degree weather was trying for all of us. As I was soaking old Smokey down my heart went out to all the California Dairy farmers in the Central Valley who watched helplessly their cattle died in the heat wave. The Western United Dairymen based in Modesto is lobbying for the region to be declared a disaster area. Disaster it is. It is estimated that California Dairy industry has lost over 1 billion dollars due to milk production declines and animal death. Farmers struggled to dispose of cattle carcass's and under emergency rules landfills were forced to accept dead cattle. One dump estimated that it disposed of over 1800 cows. Dairymen aren't out of the woods yet as the heat wave is projected to cause a continued decrease in milk production because it can take up to nine months for a cow to build up milk . Thanks Susan. That's today's Northwest Report. I'm Greg Martin on the Northwest Ag Information Network.