It has been just shy of two years since the USDA came out with its last report on energy use in agriculture. The title of this month’s new report is, “Agriculture’s Supply and Demand for Energy and Energy Products.” This time they presented the subject by saying that energy inputs no longer have a linear relationship with agriculture since commodities are now used for the production of biofuels, and that farmers adapt in other ways to rising energy costs.
The agriculture sector in the U.S. uses less than 2 percent of total U.S. energy consumption. However, energy and energy-intensive inputs account for a significant share of agricultural production costs. For example, corn, sorghum, and rice farmers allocated over 30 percent of total production expenditures on energy inputs in 2011.
From 2001 through 2011, direct energy use accounted for 63 percent of agricultural energy consumption, compared with 37 percent for indirect use, as shown in the graph below.
Direct energy uses in farming include diesel and gasoline fuels to run machinery to plant, till, and harvest; to dry crops; for livestock use; and to transport goods. As shown in the graph, less fuel was used in 2011, when prices were higher. Electricity is used to heat and cool livestock and dairy operations, and for pump irrigation. Its use has remained relatively constant, along with its price during this time period.
Indirect uses of energy on U.S. farms include energy-intensive inputs such as fertilizers and pesticides.
The following graph shows shows a breakdown of the energy components, both direct and indirect, used in farming from 2001 to 2011.
Since 2006, the USDA has been doing surveys to find out how farmers are responding to higher prices for fuel and fertilizer. Farmers have responded to higher prices by changing production practices which increase efficient use of energy. The next graphs show us how farmers responded to higher prices in the year 2006.
The energy costs of industrial agriculture may pit farming methods against each other in the future. Because there are so many components within the system, and so many crop choices, gradually the waste in the system will be worked out and more efficient machinery and methods will be adopted. For some production, labor may again be substituted for fossil fuels. But, I’d also expect that the government will subsidize agricultural energy inputs in one way or another, given some future point in time when energy is more expensive. In many ways these costs are already being subsidized or supported through policy.