| Featured Article - July 2008
In The Shadow of Equus Pupmed Dry |
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| If
you keep hearing a sucking sound while gassing up to haul out to a
competition, trail ride, clinic, or just to drive to the local feed
store, it is not the kid with a slurpee next to you at the gas station.
It is the sound of the pump vacuuming your wallet, as gas prices reach
stratospheric, nose-bleed levels. But at least you’re in good company.
Everyone is becoming increasingly concerned about the oil crisis, which
could bring us to the crossroads of a perfect economic storm. Rising
prices are sparking anger, frustration, and riots around the world. In June, the price for a barrel of light sweet crude oil peaked just shy of a record-breaking US $140 a barrel. By mid-month, in response to China agreeing to raise its prices for gas and diesel (reducing subsidies and thus the demand for oil), and Saudi Arabia agreeing to increase production by 200,000 barrels a day, the world price dropped to just shy of $132. But that benchmark price is still more than twice what it was a year ago, and some oil industry analysts have predicted it could go as high as $200 a barrel during the next 12 to 18 months. Others, though, are blaming investment speculators for driving up oil prices, and claiming that the bubble could burst, forcing the price below $100 a barrel. Meanwhile, gas and diesel prices are close to, if not already at $1.50 per litre, now that the BC government’s carbon tax has been factored in as of July 1st. The merits of the carbon tax seemed like a good idea at the time of its announcement in this year’s provincial budget. Gas prices have jumped 30 cents since then. Those additional few cents for the carbon tax are viewed by many as just another burden, despite the original environmental intention of countering that other crisis: global warming. Understandably, many riders are starting to claw back on how they organize their equestrian activities. Some are selective on how many shows they plan to attend this year. Some shows are seeing a drop in entries. A few have been cancelled with speculation that gas prices are a partial cause of the fewer entries. It could be an ominous sign of things to come, but it could also be a head’s up for the equestrian community to re-invent itself. Virtually everything we touch in the horse world is directly or indirectly dependent upon fossil fuel energy. Feed, tack, clothing, accessories, trucks, horse trailers, farrier and veterinary supplies, and materials for fencing or barn construction and repair have all come from somewhere else. Feed in particular is on the rise. While local hay production meets some of the demand, many barns depend on alfalfa or mixed hay being trucked from elsewhere in BC or Alberta. Fuel surcharges are quickly becoming a staple of trucking costs. Due to the US sub-prime mortgage crisis and the collapse of the housing market, many independent US truckers cannot afford to keep their trucks on the road, so there is less movement of hay and feed coming north. This is going to sting, so don’t wait until fall to stock up on winter feed. |
Transportation costs aren’t
the only concern. According to a
local supplier, there could be a local shortage of hay this winter due
to some commercial farms replacing hay with corn to capitalize on the
ethanol bandwagon. As the demand for biofuels has risen, the fertilizer
mines and factories of the world have proven unable to keep up. Global
fertilizer prices have risen 200 percent since 2007, and this cost is
amortized across the hay meadows. Straw as a cellulosic commodity could
also find its way into the biofuel patch, so straw baled for bedding is
also expected to spike. The US Midwest flood this spring was the worst in 15 years, and put five million acres of farmland under water. 700 million bushels of corn have been taken out of production. This is going to drive up the price of corn feed across the board. Further, the long, cold, wet spring on the coast has delayed hay growth in the Fraser Valley of BC; hopefully there will be the traditional hot summer weather to bring hay fields along for harvesting. This could all be an ominous sign of things to come, but it could also be a head’s up for the equestrian community to reinvent itself. Getting ahead of the curve is going to be the new reality for many horse owners. Bulk buying, if not already normal practice, will become a mantra with an almost religious fervour. For those with limited storage capacity, it could be prudent to pay for some rented space at a local facility, or share the bulk purchase and storage with other horse owners. If you can buy by the tonne, do so. Do not wait until fall; buy now and put it away for later. Prices could wildly fluctuate depending on where feed is coming from, the cost of gas and diesel by the moment, and the farm gate price for hay coming off of the field. Grab a bargain now and don’t wait. Meanwhile, enjoy your horse. You may not be able to afford to go to as many shows, but there are likely a lot of local trails to ride. Just for fun, consider putting on a small schooling show of your own using resources readily available. Invite horse owners to ride over to your place for the day, leaving truck and trailer at home. Okay, so it’s a retro 1960s thing, but it will be fun, and not only lighter on the planet, but lighter on your wallet. |
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