By Maynard van der Galien, Renfrew County farmer and columnist

In the days when fuel prices were cheap, farmers often worked up their soil as if they were planting a flowerbed. Now more and more farmers are using a notill drill thus saving labour and fuel. And I'm sure those farmers who still use a seed drill won't be going over the field with a disk or cultivator anymore than they absolutely have to.

With a barrel of oil trading at a near record price, and natural gas prices at least double from a year ago, farmers across Canada are feeling the effects. Rising oil costs boost farm fuel prices, and skyrocketing natural gas values have caused price hikes in essential fertilizer products. 

How can producers cope? The Royal Bank's March Agriculture Business Review publication has some good advice for farmers looking for answers.

Gary Pike runs Pike Management Group, a farm management and marketing firm based in Lethbridge, Alta; serving clients across Western Canada. Pike notes that, on paper, it's easy enough to see where quick energy savings could be made: cut back on fertilizer and reduce farm equipment fuel consumption. 

Pike says you could reduce energy use, but hurt the farm's profitability even more. He suggests to start by understanding where your energy-related dollars are going, directly or indirectly, then develop a number of different strategies. In the article, he outlines three areas where energy savings could be possible.

1. Fuel for farm equipment

Big equipment requires large amounts of fuel, making a tractor or combine the perfect place to look for savings. Right? Not so fast, says Pike. "On most farms, the biggest share of fuel is spent on pick-up trucks. Your tractor might consume 12 gallons per hour, but you only use it for 300 hours each year. Compare that to the farm pick-up truck that runs anywhere from 50,000 to 100,000 kilometres per year." Reducing the use of the pick-up could pay bigger dividends then changing usage of the farm's field equipment. 

2. Fertilizer

Since natural gas is a major component of fertilizer manufacturing, fertilizer prices often move in step with gas prices. Still, haphazardly cutting back on fertilizer could cost farm more in lost revenue than it saves through lower expenses. Pike strongly advises against an across the board fertilizer cutback. Instead, consider a targeted reduction. 

"If you must trim fertilizer use, don't assess the farm as a whole," he says. "Determine which crops in your area have the highest and lowest responses to added fertilizer. Farmers can add more legumes to the crop mix when fertilizer prices are high. If you do this, what would the impact on your nitrogen needs to in the initial year, and in the following year?"

3. Farm buildings

Apart from ensuring that insulation is adequate, consider the risks and rewards of upgrading the heating system in your farm buildings. Coal-fired boilers are strawfed boilers have become more popular in recent years, and can take the edge off high heading costs. 

Says Pike: "You shouldn't make big changes without considering the numbers objectively. Treat each piece of equipment and each crop differently, so you can understand which fuel or input purchases return the most profit, and which could be reduced. That will take some time, so start by establishing a baseline today."