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January 25, 2001   Email to Friend 

HIGH GAS PRICES COULD SPELL DISASTER FOR POULTRY GROWERS
Jeff Helms
334-613-4212
January 25, 2001

"MONTGOMERY, Ala." Skyrocketing propane and natural gas prices this winter could be as damaging for poultry growers as last summer's drought was for row crop farmers and cattlemen, according to Alabama Farmers Federation President Jerry Newby.

"This is an economic crisis for the poultry industry," Newby said. "Many poultry farmers will spend 3-4 times more for heating fuel this winter than they did last year, and some will not earn enough money on their winter flocks to make their mortgage payments."

In letters to Gov. Don Siegelman and Alabama's congressional delegation this week, Newby recommended government officials explore a variety of options to provide immediate relief to growers. His suggestions included asking poultry integrators to increase gas bonuses or per-pound prices to producers to help offset fuel costs and seeking payment flexibility from farm lenders.

Newby also said long-term solutions to the energy crisis are needed, for the sake of all farmers. Of particular concern, he said, is the cost of high-nitrogen fertilizer products. Nitrogen, which is produced from natural gas, already has doubled in price, and shortages are expected in some areas of the country. In addition, diesel fuel and gasoline prices remain high, which could make this planting season more expensive for Alabama farmers.

Unlike other businesses, farmers do not have the ability to pass their costs of production on to consumers. Poultry growers are responsible for paying their own utility bills. The price they receive for their product is set when they sign a contract, regardless of how much it costs to raise their chickens.

According to Lisa Fountain of the Alabama Propane Gas Association, the wholesale price of propane last week was almost triple what it was for the same week last year. Record-low temperatures in November and December combined with increased use of natural gas and propane for generating electricity and refining crude oil contributed to the dramatic increase, she added.

Newby said some poultry companies already have responded to requests to increase fuel allowances to growers, and he is encouraged by the concern expressed by lawmakers.

"Federation Poultry Director Jimmy Carlisle is meeting with congressional leaders in Washington next week to discuss the energy crisis," Newby said. "I believe our congressional delegation realizes the importance of poultry to our state's economy and will do everything they can to help our producers."

Last week, Carlisle met with Agriculture Commissioner Charles Bishop, Alabama Senate Agriculture Committee Chairman Zeb Little, House Agriculture Chairman Thomas Jackson and representatives of the propane gas industry. They agreed to work together on ways to help farmers cope with their mounting fuel bills.




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