No matter your political leanings, nobody can deny that our lives rely on affordable and abundant energy. We need it for obvious things like fueling our cars and tractors, heating and cooling our homes, and running the factories that make the things we use every day.
Energy is also crucial to many things we don’t think about every day. For example, natural gas is a key ingredient in producing the fertilizer that nourishes our crops, providing the food we all eat every day. Diesel powers the water pumps that irrigate our crops during the dog days of summer. Propane heats our barns to keep animals comfortable in the winter.
The runaway energy inflation we have experienced over the past two years is impacting farmers and ranchers dramatically. It has increased our input costs across the board, increasing the cost of production for food, fiber, and fuel and driving up prices throughout the supply chain. Farmers are price-takers, meaning that we cannot increase the price at which we sell our products to make up for increased input costs, some of which have doubled or tripled.
Between November 2020 and June 2022, the nationwide average diesel price went up 141%. Urea, a key source of nitrogen in fertilizer, increased 294% between April 2020 and April 2022. The overall cost of fertilizer to grow one acre of corn has risen by 62% since last year. These increased production costs are making their way through to consumers. American Farm Bureau Federation’s annual July 4 marketbasket survey found the cost of a summer cookout had risen 17% in the past year, with beef up 36%, chicken up 33% and pork chops up 31%. These rising prices are a big part of why our economy has contracted for two consecutive quarters, which is the traditional definition of a recession.
With all of these challenges, the last thing we need is for Congress to pass another massive spending bill that does not directly address inflation and our nation’s energy needs. Congressional Democrats pared back and cleverly renamed their massive green wish list as the Inflation Reduction Act. Arguably, this bill will have the exact opposite effect of the authors’ stated intention of reducing inflation.
In fact, the non-partisan Congressional Budget Office described the bill’s impact on inflation as “negligible.” Rather than focusing on policies that will bring down inflation, it spends billions on climate and the Internal Revenue Service while placing further burdensome taxes and regulations on hardworking Americans. These are not the policies families need to help them weather the storm of high energy prices and inflation as our economy is in the midst of a recession.
At Missouri Farm Bureau, we believe a different approach is needed to truly reduce costs and help working families. In particular, we support a comprehensive “all of the above” energy production plan. This means encouraging oil leasing and drilling, increasing domestic oil refining capacity, and supporting American farmers who help produce high-quality renewable fuels. These are just a few examples of policy reforms that would actually encourage domestic energy production and reduce inflation.
Gimmicky partisan wish lists and word games are not going to make energy more abundant long-term, which is what Americans need. We need to make smart investments today that will ensure a stable domestic energy supply for decades to come. American energy independence can be a reality, but only if our political leaders stop playing games and start using common sense.