NEW YORK—Fuel shortages in the U.S. Midwest are raising concerns corn farmers may have trouble harvesting their bumper crop this autumn.

Farmers planted the largest corn crop since 1944 last spring after prices hit a 10-year high of $4.37 a bushel in early 2007. The U.S. Department of Agriculture has estimated a record crop of more than 13 billion bushels.

But farmers said supplies of the ultra low sulfur diesel needed for harvesting equipment are running low, particularly in the corn-growing regions of Minnesota, Nebraska, and Iowa.

In Iowa, fuel shortages are anticipated as retailers report having only about 80 percent of their normal supply, said John Scott, a corn and soy farmer in west central Iowa.

“Worse case scenario is our crop stands in the field until we have fuel to harvest it,” said Scott, who has stored about one week’s supply of fuel in anticipation of shortages, but not enough to tide him over for the six-week harvest season.

Curt Watson, the President of the Minnesota Corn Growers Association, said the fuel terminal that usually supplies his area is dry. His supplier has to drive to another area, where long lines with a wait of four hours are not uncommon.

Experts blame a variety of refinery outages for the short supply, including a wave of maintenance shutdowns coinciding with peak harvest season from mid-September through October.

“That basically created a pulldown of inventories, more so than usual, before we entered the (harvesting) season,” said Joanne Shore, an oil market analyst with the U.S. Energy Information Administration.

Although sporadic outages are common during the harvest, this year they may be more frequent than usual and retailers may spend more time “chasing the product,” Shore said.

The high cost of ultra low sulfur diesel, a more environmentally friendly fuel which farmers are required to use for the first time this year, has also undermined the farmer’s bottom line, experts said.

NO WINDFALL PROFITS

The diesel problems are adding to overall farmer concerns about the skyrocketing costs of growing corn, which they say will erode additional profits from this year’s high prices.

Rising fertilizer costs, driven by the soaring prices of the natural gas used to make it, is the main culprit. Fertilizer has jumped from about $200 per ton to around $500 per ton over the last year, said Minnesota Corn Growers Association’s Watson.

“This is beyond abnormal: typically you hear prices going up 2.5 to 3 percent,” Watson said.

Overall input costs per acre of corn have gone up as much as 50 percent over the last year, said John Scott, who reported that his cost has increased from about $350 per acre to around $500 during the past year.

Despite rising costs, higher corn prices may mean that farmers will still be able to eke out slightly higher profits than last year, but not by much.

“I don’t see any windfall profits by any stretch of the imagination,” said Scott.

The British ambassador to Moscow today denounced Russia over its continuing failure to extradite a former KGB officer for the killing of Kremlin critic Alexander Litvinenko.

Sir Anthony Brenton said Britain-Russia relations were not in crisis but there were sharp differences over the Litvinenko affair.

In an interview with the Interfax news agency and the Kommersant newspaper, Sir Anthony said: “It is surprising to me that the Russian authorities do not see their own national interest in putting on trial, in the place where most of the evidence and witnesses are available, a suspected murderer and carrier of highly toxic radioactive substances.”

Britain has accused ex-KGB agent Andrei Lugovoi of killing Mr Litvinenko last November in London with polonium 210, but Russia has said its constitution does not allow extradition of its citizens.

In a throwback to the cold war, Britain and Russia have engaged in tit-for-tat expulsions. Russia last week expelled four British diplomats following Britain’s decision to send four Russian middle-ranking embassy officials home.

On the Lugovoi extradition request, Sir Anthony said Britain was not asking Russia to disobey its own constitution, “but to work with us creatively to find a way around this impediment, given the serious and unprecedented nature of this murder. Such cooperation has not been forthcoming.”

Russia has offered to try Mr Lugovoi in Moscow if Britain presents sufficient evidence against him. Sir Anthony said this was not an option for British prosecutors who, he stressed, were independent of the government.

“They note that the crime was committed against a British citizen and took place in London. The appropriate venue for the trial is therefore London,” he said.

Despite the tit-for-tat expulsions, Britain and Russia have sought to contain the crisis as both have considerable common economic interests.

Many Russian firms have listed in London and UK energy giants Shell and BP have substantial investments in Russia.

But relations last week took another turn for the worse amid revelations of a second assassination conspiracy.

Senior Whitehall sources said a suspected assassin was intercepted in London last month before he could mount an attempt on the life of Boris Berezovsky, the Russian oligarch who has infuriated president Vladimir Putin with his open calls for insurrection in Moscow.

For its part, Russia today again claimed that Britain’s expulsion of four Russian diplomats was politically motivated and unjustified.

Britain’s reaction was “plainly groundless, inappropriate, unjustified and lies exclusively in a political framework,” Alexander Zvyagintsev, Russia’s deputy prosecutor-general, told a news briefing.

Q: I am a widow about to turn 60, with $4.5 million worth of investments, not including my house, which is paid off. I have no other debt. I could live comfortably on income of $65,000 per year before taxes, but I’m afraid to retire, even though I dislike my work, because my parents grew up during the Great Depression and made me irrationally anxious about financial security. Can you help me feel more confident about retirement?

A: Almost everybody who reads today’s column - myself included - would love to have your problem.

If you held your $4.5 million strictly in cash - in a mattress, say - you still would have enough money to meet your needs until your late 90s, even if you increased your withdrawals by 3 percent each year to offset inflation.

If you put your $4.5 million into virtually risk-free investments, such as U.S. Treasuries or FDIC-insured certificates of deposit, you would qualify for the old-age section of the Guinness Book of Records long before you spent your last dime.

Next patient.

Q: I have been making contributions regularly to a traditional IRA. Most years I don’t qualify to contribute to a Roth, with its tax-free status, because my income is too high. When I am forced to withdraw money from my traditional IRA starting in about 20 years, I will be taxed at ordinary income-tax rates. If I were to stop contributing to the IRA and put the same amount in a regular brokerage account, at least I would benefit from the lower tax that applies to any long-term capital gains on my investments. What do you think of that plan?

A: It’s true that long-term capital gains are taxed at substantially lower rates than ordinary income, but that could change. Judging from the rhetoric, it appears that if the Democrats keep control of Congress and gain control of the White House, the capital-gains tax advantage could disappear. The tax has been a political football for decades, and has bounced all over the place.

It’s also possible that when you are ready to withdraw money from your IRA, you will be in a lower tax bracket.

Even if the tax picture remains unchanged, there still can be advantages to a traditional IRA that you shouldn’t overlook. The tax on dividends that flow into your IRA is postponed until you withdraw the money, but with a regular brokerage account you would be taxed in the year you receive them.

The same holds true for capital gains. If you sell stock at a profit in your regular account, you would pay tax for the year you realized the gain. If you accumulate capital gains in an IRA, you can use the entire proceeds to invest, tax-deferred, in something else. Under some circumstances that could allow you to build more wealth than with a regular account.

Of course, if it’s your habit to buy only stocks that pay no dividends, and to never sell a stock, a regular brokerage account might be more to your benefit. If you keep full records of your market transactions, go back to when you opened your IRA and figure out what the difference would have been, after taxes, if you had made the same transactions in a regular account.

By the way, keep in mind that despite your high income, you will be able to convert funds in your traditional IRA to a Roth IRA starting in 2010. The income limit for conversions disappears that year. You will, however, have to pay any taxes due on the amounts you convert.

LOWER-PRICED AGENTS

The promised list of real estate agents who say they will list properties for a total commission of less than 5 percent is ready for distribution. There are about three dozen agents listed so far, but more keep streaming in. If you want to see a copy, e-mail me, and I will send the list to you as an e-mail attachment.

The list does not constitute an endorsement of any agents. No effort has been made to determine the accuracy of the information provided, or to find out whether the agents listed are honest and competent. You should consult such sources as the Better Business Bureau, the local Board of Realtors and the various consumer-protection agencies. If you decide to do business with an agent, be sure to get a written statement of the full terms of the transaction.

Moneybag appears three times a month in the Sunday Chronicle. Send questions to moneybag@sfchronicle.com or to Arthur M. Louis, Moneybag column, 901 Mission St., San Francisco, CA 94103.