Diesel fuel outages, high prices could affect harvest
Lawmakers discuss options for helping Pennsylvania farms
HARRISBURG — Veteran state senators from both parties worried that high prices and rolling outages of diesel fuel might hurt the harvest of Pennsylvania crops in coming months, even as lawmakers continued to hear stark testimony on the potential impacts of soaring inflation.
The rolling outages of diesel — which powers most farm equipment — were acknowledged by Agriculture Secretary Russell Redding in a Friday letter to Gov. Tom Wolf. The average price of diesel Tuesday statewide was $6.18 a gallon, about 15 cents off the record high set last month but $2.63 a gallon higher than a year ago.
“It is a huge concern, with the price being crazy like this,” said Republican Sen. Elder Vogel of Beaver County, chair of the Senate Agriculture and Rural Affairs Committee and a farm operator himself. “It is a shame we have come
to this. It is just going to hit consumers more and more.”
Specifically, Vogel worried farm operators might hold off filling holding tanks because of losing money on the investment.
Vogel left open the possibility of calling a legislative hearing on the situation. The top Democrat on the committee, Sen. Judy Schwank of Berks County, backed that idea.
Her concern went beyond harvesting ability to the transportation of milk and feed by diesel-powered trucks. Schwank said she hoped to talk to Redding
about potential actions he might take after he told Wolf that his agency would temporarily drop the state requirement that diesel include 2% biodiesel.
The substance is made from vegetable oils like soybean, corn, or canola oil; animal fats; or recycled restaurant grease, and it produces fewer pollutants than traditional diesel.
Many nearby states have no similar requirement. Dropping it in Pennsylvania will allow out-of-state diesel to be brought into the state and sold, observers said.
The temporary action starts Monday and lasts about a month.
“We think it will have a good impact on availability,” Kyle Kotzmoyer, state and local affairs specialist for the Pennsylvania Farm Bureau, said of the state move on biodiesel. “It will open up the capacity in the state.”
But Kotzmoyer called it a “first step” that would not dissipate the financial gloom created by fuel prices.
On a farm, diesel fuel powers tractors, skid loaders, combines for wheat, and tractor-trailers and dump trucks for hauling product or supplies, he said.
“We are looking at another four months of concern until the farms have their corn and beans harvested,” Kotzmoyer said.
Ted Harris, executive vice president of the Pennsylvania Petroleum Association, said diesel fuel buyers are “disincentivized” from buying at ultra-high prices because of the chance they could drop significantly. That leads to companies not keeping large supplies of fuel on hand.
“They don’t want to lose a large amount of money on a purchase or investment,” Harris said. “It is a very tough place for fuel dealers.”
Inflation hearing
Meanwhile, the House Republican Policy Committee on Tuesday wrapped up a series of hearings on inflation in which Alex Harper of the Pennsylvania Chamber of Business and Industry said surging prices were hurting families and employers already rocked by pandemic shutdowns and stoppages.
The U.S. Department of Labor last week said inflation is running at an annual rate of 8.6%, the highest figure in 41 years.
“This run-up in the cost of food, energy and other necessary goods and services is fundamentally, a product of too little supply to meet the current high demand,” Harper said.
Joe Bishop-Henchman of the National Taxpayers Union Foundation said Pennsylvania’s 9.99% business tax rate — the second-highest in the nation — is a drag on creating economic growth that could combat higher prices.
Bishop-Henchman said that when lawmakers change policies on education, it might take years for effects to be felt. But changing state tax policies immediately changes the incentives “on where people are putting their investment dollars,” he said.
A bill to lower the tax rate via a graduated series of steps to 6.99% in 2027 passed the Senate this month and is awaiting action in a House committee.
Another testifier, Pennsylvania Manufacturers Association President and CEO David Taylor, said the list of steps state government could take to fight inflation include staying away from “economic stimulus” measures like Wolf’s proposal to send checks of up to $2,000 — using federal relief money — to qualifying households with annual incomes of less than $80,000.
“Payments of that type will only make the inflation problem worse,” Taylor said.
For months, Wolf has promoted that plan. Last week, he posted on social media that “prices are soaring. Pennsylvanians shouldn’t have to wait any longer for help” and that lawmakers should “get this money out now.”