An overwhelming majority of America’s farmers who responded to a nationwide survey say they cannot afford to purchase enough fertilizer to get them through the year. The percentage who pre-purchased fertilizer varies significantly by region.
Conducted by the American Farm Bureau Federation 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.
More than 5,700 farmers, both Farm Bureau members and non-members, from every state and Puerto Rico took the survey. Farm Bureau economists analyzed the results in the latest Market Intel.
The analysis reveals 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 and West at 69% and 66%, respectively, compared to 48% of the farmers in the Midwest.
Just 19% of farmers in the South prebooked fertilizer purchases in advance of planting season. In the Northeast, only 30% of farmers prebooked, followed by 31% in the West, and 67% in the Midwest. Even with higher pre-booking rates, almost one in three Midwestern farmers still report entering the season without securing all of their fertilizer needs.
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 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.
“With the rising cost of fuel and fertilizer, Florida farmers are facing extreme financial hardships,” said Florida Farm Bureau Federation President Jeb S. Smith. “Some are unable to afford the necessary supplies needed to keep farming, leading to lower crop production. Diesel prices alone have increased by 46% since February, raising costs for field work, fertilizer transport and irrigation during planting and growing seasons. Farmers are in urgent need for immediate economic assistance to keep their farm gates open. Without affordable fuel and fertilizer, farmers and ranchers will struggle to provide a safe and affordable food supply for Americans.”
According to the survey, 94% of respondents reported their financial situation has worsened or remained the same since last year, while only 6% reported improvement.
Get more survey results and read the full Market Intel here.
