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High fuel costs taking toll on custom harvesters

Updated:
WICHITA, Kan. (AP) _ After several seasons of battling rising costs and a widespread drought, many custom crop harvesters are calling it quits this year amid skyrocketing fuel prices.

Between 25 percent and 30 percent of the custom cutters who once followed the nation's ripening crops have left the business in the past three years, said Dave Hermesch, a harvester from a Cowetta, Okla. and former president of U.S. Custom Harvesters, the industry's trade group.

Surviving harvesters _ many running bigger equipment that can cut more acres faster _ are filling the void as Kansas prepares to harvest its 2005 winter wheat crop.

But high prices for the fuel needed to run their combines, trucks and other equipment have put a damper on what many are expecting to be a fair harvest following years of drought across much of the Midwest.

``Fuel cost is a major input to our industry,'' said Tim Baker, operations manager for Hutchinson-based U.S. Custom Harvesters, Inc. ``Some guys have been forced to raise their rates, passing (additional costs) along.''

Rick Farris, a custom cutter based in Edson, said he just got a $2,000 fuel bill in the mail for a single fuel stop he made in Oklahoma where he put gas in the empty tanks of his four combines and four trucks.

Once harvest gets going in full swing, Farris will put between 500 and 600 gallons of fuel daily into combines he runs 12 hours a day, he said. And that does not include the fuel for trucks that haul the harvested grain to the elevators.

Fuel costs this harvest season are running a third more than a year ago, Farris said.

``We are really caught in the squeeze with these fuel prices,'' he said.

To cope, Farris has eliminated all the driving he can and even bought an old, used minivan to ferry his crew around so he does not have to run the bigger, gas-guzzling vehicles as much.

High fuel prices are also driving up the costs of everything else cutters have to buy. The high steel prices have already caused steep jumps in the prices of farm equipment and repair parts, he said.

``There were quite a few harvesters that quit this year,'' Hermesch said. ``For a lot of them it was a last-minute decision. They decided they did not want to fight high fuel prices.''

While many cutters are passing some of the additional costs along to farmers with fuel surcharges, the low grain prices make it difficult for farmers to absorb all of the increased costs.

``Farmers need to get four dollars to five dollars a bushel for wheat _ then they can afford to pay what we need to stay in business also,'' Hermesch said.

At today's farm fuel levels, Hermesch said farmers could expect to pay a fuel surcharge per acre of between $1.40 and $2.00 this season to harvest the grain.

``If they want to keep their cutter in business they are going to have to pay it (fuel surcharge), and it is a decision that is going to be left between farmer and cutter,'' Hermesch said.

Marvin Gaines, a custom cutter from Logan who has harvested for farmers across the nation for the last 34 years, liquidated all his equipment on May 4.

The 46-year-old cutter said his decision to get out of the business now had more to do with caring for his three daughters _ ages 5, 10 and 12 _ than with finances. His wife died nearly three years ago.

But Gaines struggled for years as a custom harvester trying to make ends meet as costs rose. He bought his first new combine in 1981 for $34,000, and his last new one in 2003 for $200,000.

Despite the huge increases, custom cutting prices rose only $2 an acre during the same time, he said.

Insurance, which cost $1,200 his first year in the business, was costing him nearly $20,000 a year by the time he quit.

``I have told people the cost of cutting needs to be $1.50 to $2 more (per acre) than it has been for these harvesters to survive and make any kind of an income,'' Gaines said. ``We have been at the same price of $12 to $14 (per acre) for almost 23 years.''

Two years ago, Hermesch ran six combines. Last year, tired of all the stress, he cut back to four machines. This past winter, he sold another combine and now plans to run just three combines this harvest.

Hermesch has been custom cutting for farmers for the last 19 years, following the harvest of wheat and other crops from Texas to Montana.

``I want this thing to get more fun or I will quit, too,'' Hermesch said. ``We are barely making a living out here. If we don't have enjoyment, what the heck do we want to do it for?''
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