In brief
Farmers across the U.S. are grappling with a sharp rise in fertilizer prices due to geopolitical tensions, particularly the ongoing conflict in Iran. Todd Littleton, a farmer from Tennessee, anticipates a $100,000 increase in his fertilizer expenses, highlighting the financial strain on agricultural producers. The situation could become even more critical if supplies dwindle, affecting farmers who haven't preordered. Experts warn that the surge in fertilizer prices could further impact food costs in the long term, despite short-term grocery prices remaining stable. Efforts by the government to alleviate these costs have yet to yield significant relief for farmers.
BISMARCK, N.D. (AP) — Tennessee farmer Todd Littleton expects to pay $100,000 more for fertilizer this season, a 40% spike from his bill last year thanks to the war in Iran — and he is scrambling to cover that extra cost.
“The problem is, we’re so strained financially coming into this issue,” said Littleton, a third-generation farmer from Gibson County in the state’s northwest corner. “We have had a couple of record losses the last couple years, so everyone’s kind of grabbing at straws anyway, and then to have input prices increase yet again, it just really couldn’t happen at a worse time.”
Littleton, who grows corn, soybeans, and wheat, is among thousands of farmers across the country who will pay far more this spring than they expected for fertilizer that is essential to their crops. Nitrogen-based fertilizer is especially vital for corn, usually the largest crop in the U.S. and one that feeds the nation’s livestock and is converted into fuel that helps power most U.S. cars and trucks.
Farmers have complained about costly fertilizer for years, but prices have soared even higher since the U.S. and Israel attacked Iran on Feb. 28, leading to a slowdown in shipping through the Strait of Hormuz, a chokepoint for 20% of the world’s oil and natural gas. Besides increasing the price of fuel, which is key in the production of fertilizer, the shipping disruption also has largely stopped the export of nitrogen fertilizers manufactured in the Persian Gulf and limited access to key fertilizer ingredients.
About 15% of fertilizer imports to the U.S. come from the Middle East, and approximately half the global supply of the key ingredient urea comes from the region, while around 30% of ammonia is sourced there, according to the American Farm Bureau Federation.
“When the ports started raising their nitrogen prices due to the conflict and shipping concerns, that directly affects me here on the farm,” Littleton noted.
Experts signal that the ongoing conflict means farmers should expect continued pressures on fertilizer prices, potentially affecting food prices further down the line, although immediate impacts on grocery store prices may be minimal.
Efforts are being made by the government to ease the impact on farmers, including pushing for increased fertilizer imports from other nations. However, many farms may face dire shortages if they haven't secured supplies ahead of the planting season.
Tom Waters, a farmer managing 5,000 acres of crops, describes the tightening profit margins, stating: “We just have to really work hard to trim our costs and be as frugal as we can be but still provide the soil and crop what it needs to grow.”
