‘The last thing we needed’: US farmers hit by spiralling prices due to Iran war

{"text":[[{"start":9.65,"text":"Farmer John Yeley watched fertiliser prices spiral after the start of the Iran war with dismay. That quickly gave way to anger."}],[{"start":19.35,"text":"Before hostilities broke out in February, the anhydrous ammonia he spreads on his cornfields cost $800 a ton. Now it’s $1,050. That means he’ll have to fork out $53,000 more for the stuff than before the war — “a cost increase that was not anticipated at all”, Yeley said."}],[{"start":39.3,"text":"“I’m upset that in these trying times, when the ag sector is already hurting bad, it was the last thing we needed stacked on top of us,” he added. "}],[{"start":49.5,"text":"Yeley, who farms 3,500 acres of corn and soyabean near Marshall, Illinois, is not alone. Across the US, farmers are reeling from a huge surge in the price of crop nutrients triggered by the Iran war — at a time when the economics of farming were already under pressure."}],[{"start":67.4,"text":"“Everything’s going up, while at the same time you’re getting the same prices for your commodities,” Yeley said. "}],[{"start":73.9,"text":"He can just about cover the additional cost of this crucial input. But others cannot. A survey this month by the American Farm Bureau Federation (AFBF) found about 70 per cent of respondents reported being unable to afford all the fertiliser they need."}],[{"start":null,"text":"

"}],[{"start":89.10000000000001,"text":"Agricultural sector leaders are sounding the alarm. “Farmers right now are facing generational headwinds,” said Zippy Duvall, AFBF president. “The farm outlook is bleak right now and farm country needs help.”"}],[{"start":101.2,"text":"The US-Israeli war against Iran sent shockwaves throughout the global economy. Energy prices shot up as the blockage of Gulf ports choked off trade in oil and liquefied natural gas and jolted supply chains for everything from petrochemicals to helium."}],[{"start":116.3,"text":"But the Strait of Hormuz is not only a strategic waterway for a fifth of the world’s oil supply: it is a key conduit for fertiliser, a commodity indispensable to hundreds of millions of farmers across the globe. "}],[{"start":129.05,"text":"Middle East countries affected by the strait’s closure account for nearly half of global exports of urea, the most widely traded nitrogen fertiliser, according to the AFBF."}],[{"start":null,"text":""}],[{"start":139.45000000000002,"text":"The choking off of supplies has sent prices soaring. Since the end of February, the price of nitrogen fertiliser has risen more than 30 per cent, and of urea by an eye-watering 47 per cent, a record increase, according to the AFBF."}],[{"start":156.20000000000002,"text":"Meanwhile, the price of farm diesel, used to power everything from tractors and seed drills to fertiliser spreaders, had risen 46 per cent since the end of February, the federation said."}],[{"start":168.05,"text":"“This has really been a shock across the board,” said Gerald Mashange, an agricultural economist at the University of Illinois Urbana-Champaign."}],[{"start":178.05,"text":"What’s worse, the price surge came just as farmers were preparing for the spring planting season, a critical moment in the farming calendar. “It couldn’t have come at a worse time,” said Philip Nelson, president of the Illinois Farm Bureau. “It’s a very touchy spot.”"}],[{"start":192.4,"text":"Farmers were already wrestling with a multitude of problems when the war began to push up the price of inputs. Farm incomes had been trending down for the past couple of years, a result of lower grain prices and higher production costs."}],[{"start":null,"text":""}],[{"start":207.4,"text":"Agriculture was now in a “pretty challenging situation — the culmination of many years of tough economic conditions”, said John Newton, vice-president for public policy and economic analysis at the AFBF. Many farmers, he said, had been losing money since 2023. “Some . . . are going broke. They’re having to go to the federal government to ask for help.”"}],[{"start":228.5,"text":"The high price of nutrients has long been one of farmers’ biggest bugbears. It saw one of its most dramatic surges when Russia’s full-scale invasion of Ukraine pushed up the price of natural gas, the feedstock for ammonia, and therefore, for urea. They have not really moderated much since then."}],[{"start":247.05,"text":"“Ever since these fertiliser prices went up in 2022, they’ve just been sucking the life out of everybody here,” said Lance Lillibridge, a corn farmer from Vinton, Iowa."}],[{"start":null,"text":""}],[{"start":257.2,"text":"Now, though, the situation is even worse than in 2022. While costs have not risen as sharply as they did then, corn prices are much lower now. According to figures from the National Corn Growers Association, on a “currency of corn” basis farmers now need 185 bushels of corn to purchase one ton of urea — the “highest level on record”."}],[{"start":279,"text":"“If you adjust for inflation, corn and soyabeans are very similar to what they were in the mid-to-late ‘70s,” said Nelson. “And the input costs, your fertiliser and fuel, have almost quadrupled in price in that same time period.”"}],[{"start":293.1,"text":"The cost pressures meant that “a lot of farmers burned up their cash reserves” over the past few years, said Yeley. And “guys don’t have the capital lying around now” to pay for the higher inputs."}],[{"start":null,"text":""}],[{"start":305.6,"text":"Not all farmers in the Midwest are suffering. Many pre-paid for fertiliser last autumn, well before the latest supply disruptions, locking in lower prices."}],[{"start":315.20000000000005,"text":"But that won’t help them if the supply crunch persists, which many see as highly likely. “Reopening the Strait doesn’t all of a sudden result in fertiliser landing in your ports the next day,” said Newton. “It still takes time for these efforts to materialise.”"}],[{"start":330.25000000000006,"text":"Bart Morgan, a neighbour of Yeley who farms around 1,000 acres of corn and soyabean near Marshall, is also sceptical that the reopening of the strait will bring down the cost of inputs. "}],[{"start":342.15000000000003,"text":"“Fertiliser prices will take one to one-and-a-half years to settle back down, and fuel six months,” he said."}],[{"start":349.45000000000005,"text":"That means they might still be high at harvest time. “This fall’s going to be scary,” said Yeley. He predicted that many farmers would not be able to afford to put down crop nutrients during the autumn. “Guys will start to use less fertiliser and yields will go down,” he said."}],[{"start":364.80000000000007,"text":"That could lead to a decline in production which might drive food prices higher. “It’s a slippery slope,” he said."}],[{"start":null,"text":""}],[{"start":371.9000000000001,"text":"Even before the war, Illinois had been buffeted by the consequences of President Trump’s policies, in particular the trade wars triggered by his ‘liberation day’ tariffs. "}],[{"start":382.4500000000001,"text":"For a while now, Midwestern soyabean farmers have also been losing market share in China to Brazil; US trade tensions with Beijing have only accelerated that process, experts say."}],[{"start":393.8500000000001,"text":"The Trump administration stepped in to help the sector late last year with a $12bn rural aid package, in part designed to cushion the impact of the trade war."}],[{"start":402.55000000000007,"text":"Yeley says it’s not enough. “It’s a drop in the bucket,” he said. “Lipstick on a pig.”"}],[{"start":null,"text":""}],[{"start":408.30000000000007,"text":"Morgan, who was forced to give up 2,000 acres last year when his landlord increased the rent, says he can only survive financially by working a second job. “I sell crop insurance and push snow for the state in the winter,” he said."}],[{"start":422.4000000000001,"text":"He added that unless farmers own their land and machinery, or “have a good landlord who won’t keep raising your rent”, “right now there’s not much sense in continuing”. "}],[{"start":431.80000000000007,"text":"“Farming’s a passion, and I’ll continue to do it, but it makes less and less economic sense for me,” he added."}],[{"start":437.50000000000006,"text":"Lillibridge says his 19-year-old son fully intends to follow him into farming. But he may be an exception."}],[{"start":443.6000000000001,"text":"Young people were seeing their “moms and dads struggling financially” because of geopolitical tensions and the “monopolistic behaviour of Big Ag companies”, he said."}],[{"start":453.4500000000001,"text":"“They see farmers constantly with a boot on their neck,” he added. “Why would they want to do that?”"}],[{"start":459.0000000000001,"text":"Data visualisation by Ian Hodgson"}],[{"start":470.65000000000015,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1776928820_7294.mp3"}