He typically uses 1,000 gallons of gasoline and 3,150 gallons of diesel fuel in a year, and he buys from a local supplier. On the flip side, rising milk prices the past few months are helping offset the increasing fuel and fertilizer costs for dairy farmers, said Mark Stephenson, a dairy expert at Cornell University in Ithaca. A tight milk supply nationwide has triggered the price increases, which he said he expects to continue at least through September. D.C. The current retail diesel price is up 2 cents a gallon from April, but farmers in New York do not pay state and federal fuel taxes, which total about 45 cents per gallon, Slaughter said. They also are exempted from paying state and local sales taxes on farm fuels, which is 7 or 8 cents on the dollar in most Central New York counties.
Farmers also have machinery and trucks that run on gasoline.
Farmers also take a hit from milk haulers and their feed and supply companies, which typically pass on their increased fuel costs, Gregg said. Adding to their financial worries, the cost of nitrogen-based fertilizers also has risen significantly this year, farmers said. The fertilizers are made from natural gas and are used to help corn crops start growing. In Cayuga County, Weedsport dairy farmer Jerry Blumer has al ready started cutting hay on his 500-acre farm on Bonta Bridge Road, near the Seneca River. He said he took advantage of an Agway fuel program that allows farmers to buy diesel fuel in bulk at a fixed discounted price between April and November.