People are reminded of the price of fuel every time they fill up or drive by a sign outside of a gas station. In Florida, the average cost of diesel was$6.22 a gallon on Wednesday, according to AAA, compared to $3.57 a year ago. That fuel is part of the cost of getting a product from where it’s made to where people buy it.
Fern farming fueled by diesel
People might not think about diesel when picking out a bouquet of flowers, but there’s a good chance the fresh foliage in that arrangement came from a farm in northwest Volusia County, where Pierson is known as the Fern Capital of the World.
David Register got involved in the fern industry in 1977. Today, he owns David W. Register Ranch and Farms and is executive vice president of FernTrust. He says diesel powers ferneries, irrigation and spray trucks, as well as the trucks that transport ferns across the country. The fuel also affects the cost of fertilizer, chemicals, and other supplies.
“Agriculture runs on diesel fuel,” he says.
Register says farmers typically budget based on historical fuel prices. With diesel now costing more than $6 a gallon, he says higher fuel costs ripple through everything from boxes and plastic liners to chemicals. Farmers may not be able to raise their prices, especially when selling to supermarket chains, because prices are locked in well ahead of time.
“You’re just trying to stay alive at that point and make it till the next year and hope things will be better,” he says.
Higher diesel prices are increasing production and transportation costs for farmers across the state, which can put pressure on narrow profit margins.
“A lot of times in agriculture, we're price takers, we are not price makers,” says Jeb Smith, president of Florida Farm Bureau Federation and a fifth-generation farmer.
Smith says his fuel costs are 44% higher than last year.
“It's hard to pass along those costs to the consumer. You can put yourself in an untenable market position, so it can be very, very tough,” says Smith.
Smith says he hopes consumers will be patient with farmers as they work through the higher costs.
Diesel costs hit the building industry
Farmers aren’t the only businesses paying more to move products through Central Florida.
Orlando Builders Association Secretary/Treasurer Janeen Swanson is president of Weathermaster Building Products, a Sanford distributor. The company gets materials from manufacturers in Florida and other states, with products arriving by truck. It also works with subcontractors who rely on diesel-powered vehicles.
Swanson says the company is trying to reduce costs wherever it can, including cutting its own margins, to help builders get homes sold. She says businesses can’t absorb rising costs indefinitely.
“We’re not in a place where we’re able to put huge margins on projects or make a huge profit at the end of the year,” Swanson says. “There’s no way that we can continue to absorb costs.”
When someone buying a home looks at the price of a new house, the costs can be impacted by the fuel prices.
Wes Robbins is a partner and owner of W. Robbins & Company and a former president of the Greater Orlando Builders Association.
“Owning and operating a company, I have direct fuel costs with vehicles, machinery, heavy equipment on job sites,” he says. “It is quite difficult to even try to operate in the climate that we're in.”
Robbins says he’s seeing fuel charges on pretty much everything that he buys every day.
“Those costs compound exponentially, which ultimately results in increased costs in housing, which is really not what we need right now,” he says.
