Do you remember what you paid for gas when you were a young adult or 20 or more years ago? I regretfully admit to remembering 50 cents a gallon gas price in the 70s. What do people do when gas prices escalate to the current levels and higher?

We become accustomed to inflation’s impact on our costs. If you were living in 1970, you may remember the following prices (as found at: http://www.thepeoplehistory.com/1970s.html) The cost of a new home: $26,600.The median household income was $8,734; the cost of a first-class stamp was six cents; the cost of a gallon of regular gas was 36 cents; the cost of a dozen eggs was 62 cents; the cost of a gallon of milk was $1.15. The cost of a Dodge Colt was $4,785.

In a Sunday article for the New York Post, Jonathan Trugman writes: “Commodity prices — energy in particular — have risen sharply and those large increases have a negative impact on our limping economy. However not much of the price hike comes from US consumption as many would lead you to believe.

“In fact US oil demand for the week ended May 6 was 18.164M barrels a day — the lowest level in two years. Demand is down 6 percent, or 1.156M barrels below year-ago levels. So, as demand in the United States has been falling, oil prices have been rising. This is partially due to demand from growing nations like China and India and is out of our control.”

The national average on Thursday was $3.88 a gallon. How do the gas prices affect us in the valley?

Farmers have to use gas to operate their business and feed the world. How do they cope with the fluctuating costs?

Moorhead farmer Curt Borgen said, “They are taking some shortcuts and making less passes through the field than they normally would have.”

Curt Rehder, owner of Curtis Oil Company in Sabin, Minn. said, “Some farmers lock in and secure a price but then that can be bad, too, if the price goes down. The fact that it is so unstable and moves so quickly makes it hard. Gas was overpriced due to speculation and fear; but since bin Laden was taken out – that has taken out some of the uncertainly and fear.”

Exxon Mobil reported first-quarter profits of $10.7 billion, and Royal Dutch Shell earned $6.3 billion, up 69 and 30 percent respectively from the first quarter 2010.

Andrew K. Dart talks about gas prices on his web site: www.akdart.com/gas.html. “When you buy a gallon of gasoline, the government receives the largest chunk of your money. According to one report, for a dollar’s worth of gasoline, 34 cents are accounted for by exploration and production, refining takes up 6 cents, wholesalers get a nickel, and the service station owner gets 12 cents. Taxes take up the rest.” The Federal sales tax is 18.4 cents per gallon and states have tax rates that vary. Dart adds: “Gasoline is a bargain at $4.00 a gallon. Get used to it. Driving a car is a luxury for which we should be grateful.”

Kelly Myers, owner of Kelly’s Chrysler in Ada, Minn. said, “Sales of new and used vehicles are better this year than last year, even with the $4 gas. I feel our good farm economy has a tremendous impact on our retail business. The $4 gas is not impacting our business the way it did last time gas went up. We learned to accept $3 gas, so the jump to $4 gas is not quite as bad as last time. When we went from $2 gas to $4 gas, a lot of people got very nervous and made some quick trades. Many people traded in nice full size SUVs for small economy cars. They paid way too much for the economy cars, and received very little for their big SUVs. So in the long run, it cost them a lot of money to save gas. I think many people learned their lesson and they aren’t ready to make that mistake again.

“People should buy what they want to drive and buy something that fits their lifestyle. Most of the new cars, trucks and SUVs are getting a lot better mileage than they used to. We have 4×4 SUVs that are rated at 22 mpg. plus they are roomy. Also, one of our best sellers is our seven passenger town & country van, which is rated at 25 mpg, not bad for a roomy van with lots of luxury.

“In a rural community, we tend to inventory and sell more pickups, vans and SUVs so the small economy cars are not a big part of our inventory. We haven’t seen a drop in sales of those types of vehicles, because that is what our market likes to buy. What the higher gas prices have done is increase the market prices of used cars that get pretty good mileage. This would not be limited to economy cars, but also the midsized vehicles that will get in the high 20s for gas mileage. So if you have one of these types of cars to trade, now is a great time to upgrade for a brand new one.”

Jerry Janssen, a Barnesville farmer, said the fuel prices have a big impact on their input costs. “We have been moving for a long time to less tillage and hopefully, some other efficiencies to save fuel. Other efficiencies would be handling grain differently; there isn’t a lot to be gained there.”

Janssen said, “Some lock in some fuel prices; if you lock them in you’re still at risk, you may be locking in a high price unless your timing is perfect. None of us like high priced fuel, but high-priced fuel isn’t all bad; it makes some of the other forms of energy more feasible. As a farmer, I like petroleum, and use biofuel. There is 5 percent biofuel in the diesel and there are advantages to the bio diesel additive. We are a fuel intensive business and when the price goes up 35 percent it makes quite a difference in what we are spending in fuel. The price of corn and soybeans are related to the price of fuel and some of the expense may be recovered in higher commodity prices.

“Everything we buy is more expensive: the price of fertilizer is up. Chemicals like herbicides and pesticides are petroleum price related,” Janssen said. “Our costs haven’t just increased in the fuel — it is everything. It will force us to be more efficient and maybe do things better with the fertilizer we use.”

Janssen also pointed out that, “As our dollar loses value worldwide it becomes easier for foreign countries to purchase products produced domestically in the US,” Janssen said. “As the US dollar declines, petroleum will generally go up in price just because of the devaluation of the dollar. Foreign importing countries are importing huge quantities of corn and soy – the dollar is down so the prices have not increased for them too much.” One can see the inverse relationship between the US dollar and the price of gas in the charts created at the Barnesville-based Agassiz Valley Grain web site.

You can’t go back. Even if you try, things are never the same. As a society we adjust and adapt and learn to get along. The prices of the 70s will never come again but we can adjust our attitudes. We can find ways to conserve fuel, reconsider that trip to the store and earn more money to pay for the rising and fluctuating price of petro.