Fuel prices hitting America's farmers hard as some fear for their future

Rising fuel prices are hitting some farmers hard. So far this season, Betty Allen Farms spent tens of thousands of dollars more on diesel than they’re used to. Farmer Keith Allen says these are the most expensive prices he remembers.

"It went from $2.70 a gallon to $4.70 a gallon," he said.

In just over 3 months, a couple million corn stalks will stand in Allen's cornfield. But right now, it’s planting season. One tractor preps the soil, another places the seeds, and a sprayer kills winter weeds. His operation requires 20,000 gallons of fuel per year.

"That’s about two dollars times 20,000. So that’s 40,000 dollars extra," Allen said.

Allen says the spike in costs will eventually affect consumers. Because as the cost of farming goes up, the cost of groceries will likely follow.

"Our nitrogen production is related to the fuel price. So our inputs on our fertilizer side have doubled also, and that’s a bigger chunk of the pie," Allen said.

"Production costs across their entire bottom line are rising and have been rising for the last few years," said Shelby Myers, an economist with the American Farm Bureau Federation.

The federation says farm production costs are likely to increase 6% in 2022, which follows a 12% increase in 2021. Fertilizers, seeds, and chemical prices are also contributing to the increase. But a possible saving grace for farmers like Allen is the rising price of corn.

"Commodity prices have risen enough to cover that increase, we hope," he said.

Allen says corn prices are up because of droughts in Brazil and Argentina. That makes his crops more valuable, at least for the moment.

"You see the stock market move up and down. But commodity markets are moving up and down too," he said.

"Price is going to fluctuate very dependently on supply and demand," Myers said.

According to the Chicago Board of Trade, corn goes for around $7.50 per bushel as of March 2022. Just six months earlier, it was closer to $5.

Allen said he should be okay as long as prices don’t dip before harvest time.

"If commodity prices don’t stay as high as they are, we won’t be able to farm next year," he said.

Even if fuel gets cheaper soon, Allen said it’s too late to help. He buys in bulk, so he has already purchased the fuel he'll through the fall. That means those high prices are locked in.

Rate hikes, high prices leave first-time homebuyers ‘frustrated’

First-time homebuyers are growing increasingly "frustrated" by interest rate hikes and pricey properties presenting new challenges to an already red-hot real estate market.

"Only in New York, in Westchester, can I make a six-figure income and have to move into my parents’ basement to try and save more money to be able to afford a home," first-time buyer Sal Costello told FOX Business’ Gerri Willis.

Costello, who’s been looking for a house with his wife for a year and a half, hasn’t been able to close a deal after making three separate offers – and he’s not alone.

Half of homebuyers say their top concern is affordability, according to a U.S. News & World Report survey out this month. Census data shows the median sale price of new homes was $400,600 in February 2022, up from $362,000 one year ago.

But there’s another hurdle in the way: 30-year fixed mortgage rates have now hit 4.16% according to Freddie Mac, reaching their highest levels since 2019. Also, the Fed’s recent rate hike has led to rising borrowing costs, adding onto already historic highs for home prices.

A recent study from Zillow found actual home price increases are running faster than people make in an entire year, projecting price growth to reach 22% year-over-year in May.

"In Silicon Valley, average prices went up $229,000 year-over-year," Willis reported on "Varney & Co." Wednesday. "That's $136,000 more than people made. So these prices are out of control, people are struggling."

With bidding wars and all-cash offers saturating the market, one real estate expert is encouraging buyers to look beyond what’s shiny and new.

"The smart move is to have your agent look for houses that have been on the market for two weeks or more," Chad Morton of Maverick Realty previously told FOX Business. "If something's on the market for more than two weeks, there's an issue, but that is an opportunity for you."