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, 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. are from the Middle East, and about half the global supply of the key ingredient urea comes from the region, along with 30% of ammonia, according to the American Farm Bureau Federation.
“When the ports started raising their nitrogen prices due to the conflict due to shipping concerns, that directly affects me here on the farm,” Littleton said.
Some farmers may not find fertilizer
But it could be worse, as some farmers may not be able to obtain fertilizer at any price, said Zippy Duvall, president of the American Farm Bureau Federation.
“We’re being told that many of our farmers that haven’t preordered their fertilizer and paid for it may not even obtain the fertilizer that they’re going to need during the season or for spring planting,” Duvall said. “That’s why this situation is so serious.”
Harry Ott, a cotton, corn and peanut farmer who also leads the South Carolina Farm Bureau, said there isn’t enough fertilizer stockpiled in warehouses to meet demand in the coming months.
“It is a really dire situation that our farmers facing,” Ott said.
Experts say don’t expect a quick fix
Even before the current spike in prices, other factors in recent years have led to high fertilizer costs, starting with the war between Ukraine and Russia, which blocked access to raw materials and increased natural gas prices. China also cut phosphate exports as it focused more on domestic needs.
The latest factors worsened those existing supply issues, which means that even if the Iran war was resolved, fertilizer prices likely won’t quickly fall, said Jacqui Fatka, a farm supply economist for creditor CoBank.
“There’s going to be a tail to this that’s going to take time to get everything turned back on, sent back out,” Fatka said.
And then there is the time it takes for shipments from the Middle East to reach the U.S. — typically 30 to 45 days to reach the Port of New Orleans.
