Minn. fertilizer supply buffers Iran war price shocks

Minnesota farmers are closely watching price shifts for commodities such as fertilizer and fuel, which are climbing nationwide due to supply disruptions in the Middle East.

The price surge stems from a virtual halt in barge traffic through the Strait of Hormuz, as the U.S. and Israel continue strikes against Iran.

“I think most people are just thinking, ‘Hopefully this doesn’t go on a whole lot longer,’” Minnesota Farm Bureau President Dan Glessing said. “Hopefully, the Strait of Hormuz will open up, and this was just a little blurb on the radar, but the longer it goes on, it could be significant.”

With planting season in Minnesota starting next month, it’s an especially bad time for a sudden surge in costs for farm inputs, such as fertilizer and fuel.

Glessing said his local co-operative, where he buys fertilizer, hasn’t experienced price shocks because it ordered enough fertilizer in advance. Other Upper Midwest co-ops, such as CHS, similarly hold robust fertilizer inventories for the spring planting season. 

However, Glessing said farmers in other areas are checking in with their vendors to see whether fertilizer prices changed.

And farmers may be loath to scale back their fertilizer use, despite price increases, Glessing said, because that could make them miss out on potential yield gains, a measure of productivity.

“If you’re going to cut yourself on the fertilizer use, you’re really not maximizing your return on investment, on the rent, the insurance, the feed, all of the things that go into raising that crop,” Glessing said.

On top of that, as farmers take their machinery out to the fields to plant their crops, they’ll be using up quite a bit of fuel. And with diesel prices skyrocketing, Glessing said farmers could experience a “double-whammy” of cost increases.

In Washington, lawmakers are in talks about including $15 billion in tariff relief in a military funding package. Similarly, the Republican Senate Agriculture Committee chair has called for additional aid for farmers amid price shocks in key inputs.