Farmers across the U.S. are feeling the pinch from escalating prices.
"It does seem it's just like one thing after another here, and it's really created, for agriculture, a state of uneasiness."
That is Minnesota Department of Agriculture Commissioner Thom Petersen, who says soaring fuel prices are adding to the turmoil farmers face heading into the spring planting season.
Petersen adds this piles on top of trade deals that have left Minnesota, and farmers everywhere, in a vulnerable spot.
"Trade to me is about relationships and Minnesota has always had a strong relationships with all of our nations that we trade with," Petersen explains. "And so, we'll continue to work on that, but that problem with that trade has caused a lot of uncertainty, again in the marketplace. And in some cases the markets may go way up and then they may go way down."
The latest round of uncertainty comes as farm mediation notices are nearly five times what they were in 2024. Minnesota has lost around 1,300 farms just in the last year and a half.
The cause, says Petersen, comes down to costs.
The latest issue has been the war in Iran, as the much publicized rise in fuel prices - especially diesel - has impacted farmers. But fertilizer is also being impacted due to the war. That means thousands of farmers across the country 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.
Petersen says many farmers pre-paid for fertilizer and fuel to somewhat deter rising prices.
"But a lot haven't. With the financial condition of farmers, a lot of farmers, it took a while to get their operating loans they had to move things around," Petersen says. "And so, for a lot of those farmers that haven't finished their fertilizer purchases or need to, some of them can't even get a quote at the moment."
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.
Petersen says the financial crisis farmers are facing is evident.
"Sometimes five times as many mediation notices, so those are farmers that are behind on equipment, on their land who are getting notices from their bank," Petersen adds. "We know farm bankruptcies are up, so we know those farmers are facing those problems."
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.
Minnesota has lost around 1,300 farms just in the last year and a half
