Video: High oil prices impacting farming communities

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LOPEZ ISLAND, Wash. - At nearly $123 dollars a barrel, oil hit a new record Tuesday. And drivers in the area are feeling that at the pump.

In Seattle, Bellevue and Everett, the average for a gallon of regular is $3.74. In Tacoma it's $3.71, and in Bellingham the average is $3.82.

But it's well over $4 on Lopez Island, where Bruce Dunlop has a sprawling farm.

It's home base for an operation producing 20,000 pounds of lamb and pork each year.

But his farm continues to lose money due to the rising cost of gasoline, and what it costs Dunlop to deliver his finished product to restaurants from Anacortes to Tacoma.

"A roundtrip now between the ferry charge, and fuel is about $125, last year about $100, year before that was $75," he said.

Dunlop blames heightened fuel costs and grain prices as factors for his decision to raise his prices a quarter a pound so far this year.

One of the reasons why gas prices are so high on Lopez Island - $4.24 a gallon - is because all of the gasoline must be brought in by private transport and that adds about 10 cents per gallon.

"We've had to raise our prices to cover that," Dunlop said.

But Dunlop hopes and believes by growing his own feed and making fewer deliveries to the mainland, he can eventually offset the San Juan Island gas costs - which are arguably the highest in the state.

"We're gonna be living with higher prices and we have to just learn how to adapt," he said.

Dunlop believes the weakened dollar has also impacted the commodities market, specifically grain. That has affected farmers in and outside of San Juan County.