The agriculture sector’s demand for energy is historically less than 2 percent of total U.S. energy consumption. However, because the use of energy on agricultural operations typically includes the direct use of fuels and electricity and indirect use of energy through energy-intensive inputs (most notably fertilizer and pesticides), energy and energy-intensive inputs account for a significant share of agricultural production costs. According to the U.S. Department of Agriculture (USDA) roughly 15 % of agricultural production cost are energy related (Beckman, Borchers, and Jones, 2013).
The U.S. Energy Information Administration 2013 Annual Energy Outlook Report estimates thenational average cost for electricity in the industrial sector, which includes agricultural and irrigation, is projected to increase from 6.4 cents per kWh in 2013 to 12.8 cents per kWh in 2040. As energy prices rise, these costs claim an ever-bigger portion of farm budgets.
As a result, many farms are now considering new ways to manage energy use. Investing energy efficiency measures often provides substantial returns to the farm in energy cost savings. Common energy efficiency measures on the farm include frequent maintenance of equipment, new lighting, improving building efficiency, variable frequency drives, and/or installing new high-efficiency motors and equipment.
The fact sheets listed below are part of a farm energy series developed by The Iowa State University Farm Energy Initiative. The purpose of the initiative is to increase farmers’ awareness of opportunities for improving efficient use of farm energy. Additional ISU publications and educational materials focused on farm energy conservation and efficiency can be found at http://farmenergy.exnet.iastate.edu.
Beckman, Jayson, Allison Borchers, and Carol A. Jones. Agriculture’s Supply and Demand for Energy and Energy Products, EIB-112, U.S. Department of Agriculture, Economic Research Service, May 2013.