NASHVILLE, TENN. (RFD NEWS) — Rising fertilizer and fuel costs are tightening margins for U.S. farmers during spring planting, with many unable to afford full input needs, according to a new American Farm Bureau Federation survey.
Nearly 70 percent of farmers reported they cannot afford all the fertilizer required this season, while diesel prices have surged roughly 46 percent since late February, driving up costs for fieldwork, transportation, and irrigation. Those increases are tied, in part, to global disruptions stemming from instability in the Middle East.
Fertilizer access varies widely by region. Midwestern producers, who typically pre-book inputs, reported higher availability, with about two-thirds securing supplies ahead of planting. In contrast, just 19 percent of Southern farmers pre-booked fertilizer, leaving them more exposed to rising prices.
Smaller farms face greater risk, as they are less likely to secure inputs early and more vulnerable to price spikes. Commodity differences also stand out, with cotton, rice, and peanut producers reporting the greatest affordability challenges.
Financial stress is widespread, with more than 90 percent of farmers reporting their financial condition has worsened or stayed the same compared to last year.
As energy markets continue to make big moves, longtime traders say the current volatility is unlike anything most will see in their entire careers.
“I was showing one of my staff the movement between just this week in oil,” explains Jeremy Zwinger. “You go up to $108, you go back down to $90, I think we’re at $93-$94 a day. And these are market shifts that you don’t see at all. If you look at the two-month chart, you went from $60 to a high of I think $118, $119. That’s volatility. I mean, this is beyond the measure of most people in all their careers. And so, if you look at the egg markets, they really haven’t been that volatile because we’re fighting against this big conflict against very, very, very high supply.”
Zwinger says he will be closely watching how soybean futures react in the coming weeks and months.
“If I were a soybean grower, I would be locking in my risk management techniques using the board and the deferred contracts,” Zwinger advised. “Because with this fertilizer, tobacco is going out throughout the world, there will be more soybeans than people are thinking, especially because planting intentions were done in February, pre-Iranian conflict.And then this all came on. And so, if a person could shift to get seed, they were going to move to soybeans if they were a soybean grower. So soybeans, I think, are especially going to get hit as you move forward.”
Zwinger says he is also watching wheat right now. Stocks are high, and he warns that any shifts in production or demand could create an oversupply. He adds that the current reality is difficult to analyze because of the volume of conflicting variables.
Oil is not the only big-ticket item stuck in limbo, as the blockade of the Strait of Hormuz continues to halt barge traffic carrying key agricultural commodities. Corey Rosenbush with The Fertilizer Institute warned RFD NEWS this week that a number of vessels carrying key nutrients are waiting, but that remains only part of the equation.
“Last I heard, we had about 24 vessels that were loaded and stuck behind the Strait, so those vessels are not moving to their final destination,” Rosenbusch explained. “India, for example, had done a tender of 1.5 million metric tons of urea. About a third of that was supposed to come through the Strait, and none of it got out. So, we’re getting to a point now where those empty vessels that can be used as storage for the manufacturers in the Gulf are full. And so they’re going to have to start idling down their manufacturing. And of course, we know about 40% of globally traded urea comes through that straight, and over 50% of all sulfur.”
Rosenbusch said most farmers have the nutrient supplies they need for spring planting — it is summer and fall applications that have them concerned.
“We’re now starting to think about summer side dress and frankly speaking, the fall,” he said. “So, you know, we, we estimate we’re kind of down to the last 10%. And really, it’s a urea issue. I think for spring planting, that last 10% that we need a little over a million metric tons of urea. You know, a lot of the I-states, the Corn Belt, where 50% of fertilizer is used, have done some significant planting; they have some of that product positioned ready to go. It’s going to be some of the marginal acres in the South and in the Northern Plains that are probably going to be most affected for spring.”
Rosenbusch says the sooner the Strait can reopen, the better prepared the ag industry will be for the months ahead.
Fuel and fertilizer prices remain top of mind for farmers, with ongoing uncertainty beginning to influence activity in the farmland market.
Jeramy Stephens with National Land Realty joined us on Wednesday’s Market Day Report to provide insight on what landowners should be considering.
In his interview with RFD NEWS, Stephens discussed how geopolitical uncertainty is making it difficult to predict where markets will stand in the months ahead and outlined steps landowners can take now to avoid being caught off guard later this year.
Stephens also highlighted why spring is a key time to prepare for potential land sales, sharing what landowners should keep in mind as the market moves toward the summer selling season, and addressed how broader economic uncertainty could impact farmland values and market activity moving forward, as well as whether any major shifts in land prices are expected.
Finally, Stephens offered guidance for farmers as they navigate the current environment and make decisions in an evolving market.
