Most farmers in the United States who responded to a nationwide survey say they cannot afford to purchase enough fertilizer to get them through the year, according to American Farm Bureau Federation, which conducted the survey and published the results Tuesday.
More than 5,700 farmers, from all 50 states and Puerto Rico — both Farm Bureau members and non-members — participated in the survey. Conducted April 3-11, the survey shows 70% of respondents say fertilizer is so expensive that they will not be able to buy all the fertilizer they need.
Farm Bureau economists analyzed the results by region in its latest Market Intel report. The analysis shows that almost 8 in 10 farmers in the southern U.S. say they can’t afford all needed supplies this year, followed by the Northeast at 69%, the West at 66% and the Midwest at 48%.
Farm diesel prices have risen an average of 46% since the end of February. Higher energy prices also increase the cost of producing nitrogen fertilizer, which relies heavily on natural gas as feedstock. Together, the overlapping increases may help explain why 94% of farmers surveyed reported that their financial conditions have worsened or remained the same since last year.
“The spike in fertilizer costs, and in associated diesel fuel costs, is a negative multiplier for farmers in what is already a very challenging season,” said New York Farm Bureau President David Fisher. “We are already dealing with labor shortages, fluctuating tariffs and unpredictable weather. And, in addition to higher fertilizer and diesel prices, we are now subject to significant surcharges for delivery of fertilizer from ports to distribution centers.”
Even those who preordered fertilizer — about 30% of farmers in the Northeast, according to the survey — may pay more than planned, according to Fisher, who added, “When it comes to profitability, farmers are at the bottom of the food chain.”
The conflict in the Middle East sent fertilizer and fuel prices soaring. The closure of the Strait of Hormuz is keeping critical fertilizer supplies and crude oil from reaching global markets, putting a squeeze on supplies around the world.
“Spring planting decisions depend heavily on access to fertilizer and diesel fuel, both of which have been impacted by geopolitical risks that have disrupted global markets,” the AFBF Market Intel states. “Since the escalation of tensions in the Middle East, nitrogen fertilizer prices have risen more than 30%, while combined fuel and fertilizer costs have increased roughly 20% to 40%. Urea prices have increased by 47% since the end of February, marking the largest month-to-month percentage increase in the price of urea. These increases are occurring when many producers were already facing tight margins for many consecutive years.”
Many of the farmers surveyed said they will forego applying fertilizer this spring in hopes that prices will return to an affordable level later in the growing season.
“The skyrocketing cost of fuel and fertilizer is creating more economic hardships for farmers who have already endured years of losses. Without the necessary fertilizers, we’ll face lower yields and some farmers will reduce acres altogether, which will impact food and feed supplies,” AFBF president Zippy Duvall said. “It’s too early to know how this will affect food availability and prices in the long run, but it’s a warning light that we’ve shared with leaders in Washington. We look forward to working with them to find solutions so farmers can continue to feed families across America.”
To read the full AFBF Market Intel, visit www.fb.org/market-intel.