Farm business reliance on energy-intensive inputs varies by commodity specialization
Agricultural businesses, particularly those specializing in crop production, are heavy users of energy and energy-intensive inputs. Ignoring the energy embodied in purchased machinery and services, energy-based purchases accounted for over 25 percent of farm operator expenses in 2012, on average. While motor fuel accounts for about 6 percent of operator expenses, the farm sector is a heavy indirect consumer of natural gas; up to 80 percent of the manufacturing cost of fertilizer can be for natural gas. Expenditures for fertilizer were over 11 percent of total operator expenses among farm businesses in 2012, with much higher expenditures for most crop farms. In addition, farm businesses are often heavy users of electricity, with poultry production having the highest share of electricity expenses (5 percent) among all types of producers, while cotton and rice producers have the highest share of electricity expenses (3 percent) among crop producers, primarily for irrigation. Natural gas as a source of electric power has been increasing in recent years, reaching 27 percent of electricity generation in 2013. As a result, the farm sector is particularly sensitive to fluctuations in the price of natural gas. This chart is found in the September 2014 Amber Waves data feature, Agricultural Energy Use and the Proposed Clean Power Plan.