WASHINGTON, D.C. (RFD NEWS) — Tensions in the Middle East are creating new uncertainty for U.S. farmers as they finalize input decisions ahead of spring planting. The situation is raising concerns about higher fuel and fertilizer costs, which could ultimately influence acreage decisions and yields this season.
American Farm Bureau Federation (AFBF) Economist Dr. Faith Parum joined us on Thursday’s Market Day Report to explain why developments in the region are so important for U.S. agriculture.
In her interview with RFD NEWS, Parum says tensions are impacting global energy and fertilizer markets at a critical time, just as U.S. farmers begin spring planting. Shipping disruptions around the Strait of Hormuz could push both fuel and fertilizer prices higher, adding pressure to farm budgets that are already tight.
Parum notes that countries bordering the Persian Gulf play a significant role in the global fertilizer supply, particularly in nitrogen products. Roughly half of the world’s urea exports and about 30 percent of global ammonia exports originate from that region, meaning disruptions can quickly affect prices worldwide.
While the United States imports only about 15 percent of its fertilizer directly from the region, Parum says fertilizer is priced on a global market. As a result, supply disruptions elsewhere can still lead to higher costs for American farmers. With production costs already at record levels, Parum says higher fertilizer or fuel prices could squeeze margins further and lead some farmers to apply fewer inputs, adjust crop mixes, or even reduce acreage.
She adds that agriculture groups are urging policymakers to help ensure safe passage for oil and fertilizer shipments through the region while also considering policies that could reduce input costs, including reviewing tariffs on certain agricultural inputs.
