Effects of Energy Price Rises, Energy Constraints, and Energy Minimization on Crop and Livestock Production Activities

Abstract

This analysis is designed to assess the impact of rising energy prices and constrained energy supplies on a representative Iowa farm and to evaluate the feasibility of adopting energy-conserving technologies within an integrated farm system. The results indicate that the representative farm is insensitive to moderate increases in energy prices but is more responsive to substantial increases. Results also show that some energy-conserving or substituting technologies may now be feasible for adoption while others may never become viable unless drastic energy price rises occur. In the days of cheap fossil fuels and abundant agricultural production, farmers and society in general displayed limited interest in energy costs and in crop and livestock production residuals. Events of the 1970s, including rising energy prices, restricted energy supplies, and growing awareness of the impact of confined livestock feeding on world food supplies, have given rise to interest in new and old technologies that converse energy use in agriculture and to the need for adjustments in current agricultural production practices. The potential vulnerability of food production to energy price increases and energy shortages raises two important questions for U.S. agriculture: (1) What adjustments can we anticipate in existing crop and livestock production activities and in farm incomes as energy prices rise or as energy shortages occur?1 (2) How feasible are new energyconserving technologies that may be adopted by farmers? This analysis is designed to assess the impact of rising energy prices and constrained energy supplies on a representative Iowa farm and to evaluate the feasibility of adopting alternative energy conserving technologies within an integrated farm system. More specifically, the energysaving or substituting practices include using anaerobic methane fermentation to produce electricity and heat on the farm; using crop residues and livestock excreta as a source of livestock feed; and using livestock excreta and legume rotations as a substitute for chemical fertilizers. This analysis is not an attempt to evaluate an exhaustive set of energy-saving technologies but to illustrate a systems framework for considering such alternatives.