|
When Jolene Riessen was quoted $750 a ton for fertilizer last fall -- about 15% more than the previous year -- she decided to hold off until spring.
Then came the Iran war.
As global supply chains were thrown into chaos, a retailer near Riessen’s farm in northwest Iowa said she could book fertilizer but not get a fixed price until later. The next week, after waiting again to buy, the same dealer offered $1,000 a ton.
“Everybody buys their fertilizer basically in August and September, and that's when it gets shipped in,” Riessen told Agri-Pulse. “For him to say, ‘it's gone up in price because of the war’ -- I just wanted to throw a BS flag.”
Riessen, who raises corn, soybeans, alfalfa and feeds cows and calves, went elsewhere and got the crop nutrients needed for her upcoming plantings at $840 a ton.
“I've been farming a long time, 40-plus years. I lost my husband to cancer seven years ago. So, it's pretty much me and my boys doing the farming,” she said. “Going through this right now with fertilizer prices, I guess I want to just call it sickening, for lack of better words.”
The sticker shock isn’t new. In recent years, amid war and energy market disruptions in Europe, Riessen has seen prices go from $500 to $1,500 and then back down again within a single season.
Jolene Riessen (Iowa Corn photo)Frustration rises over topsy-turvy prices
What’s also gone up is farmer frustration over the volatility, and Washington's scrutiny of the fertilizer market. After fertilizer prices surged to records in the wake of Russia’s invasion of Ukraine in 2022, questions from farm groups increased.
“For many years we’ve had a fertilizer issue, not just in Iowa but the entire country, and it’s just continually getting worse, and it’s because of consolidation in the marketplace,” said Iowa farmer Lance Lillibridge. “I don't care what kind of farm you’ve got, if you're buying fertilizer, even if it's a golf course, you're being affected by this.”
Late last year, the Agriculture Department and Justice Department announced a joint query into high prices for fertilizer and other farm inputs. Sens. Chuck Grassley, R-Iowa, and Tammy Baldwin, D-Wis., have joined together on a bipartisan bill calling for a USDA study of fertilizer markets and industry concentration.
Sen. Josh Hawley, R-Mo., wrote last week to five of the biggest fertilizer producers and Attorney General Pam Bondi seeking assurance that companies aren’t engaged in price gouging or market manipulation in the wake of the conflict in Iran. And Bloomberg News reported March 4 that DOJ is investigating the U.S. fertilizer market for possible price fixing. Two class-action lawsuits have been filed against major manufacturers.
Top fertilizer companies have pushed back on criticism over prices, citing highly competitive and sensitive global market for the price swings.
“I understand it costs a lot of money to mine and everything, but somewhere in the middle is what's fair,” said John Schroeder, a fourth-generation corn and soybean farmer in Ohio with his son, Anthony.
The price spikes, with urea recently climbing more than 30%, hit as growers of corn and soybeans, the two biggest U.S. crops, face forecasts for a fourth year of negative returns in 2026.
The Fertilizer Institute, the top U.S. trade group for the industry, said in a recent statement that there is a global and highly integrated market for crop nutrients and that the impact of the Iran war on fertilizer pricing would “depend on a number of factors with time being chief among them.”
"Supply disruptions in one part of the world can ripple across the trade routes and affect availability and price in other regions," TFI said. "While the United States is both a fertilizer producer and importer, those same global supply dynamics play a role in determining input costs for American farmers."
Could fertilizer costs affect acreage?
On March 31, USDA is set to release closely watched early planting estimates based on farmer surveys. The agency’s chief economist last month forecast 94 million acres of corn seeded this spring, down nearly 5 million from last year amid an over supply of grain. Soybeans were seen up almost 4 million to 85 million acres.
The recent additional surge in fertilizer prices has farmers rethinking earlier plans. Corn relies heavily on fertilizers like nitrogen versus soybeans, which are much less dependent.
Schroeder said he recently changed a few acres on new ground that could have gone to corn. “We don’t know if we could get the fertilizer,” he said.
Riessen said she plans to cut back on phosphate and potash and do just the minimal amount for maintenance.
John Settlemyre, who farms soybeans, wheat and corn in southwest Ohio, said he might use 25% less fertilizer than last year to save costs.
He also is thinking of shifting to more foliar fertilizers, which are applied directly on a plants’ leaves. “The efficiencies might be a little better,” he said.
The quandary for farmers in cutting back on fertilizer is the risk of being left with lower production, which in turn can lead to lower yields.
“If we don't get yield, then commodity prices go up, and so does everybody's groceries,” Lillibridge said. “You just start an entire problem within the food chain.”
More than a third of global fertilizer traded via sea goes through the Strait of Hormuz, which Iran has effectively shut down.
“If the war doesn’t resolve soon, and I mean within the next 10 days, there will be some guys switching over to beans,” Schroeder told Agri-Pulse, citing the fertilizer and fuel price hikes.
Meanwhile, Riessen said her 90-year-old father is planning to retire from her family’s farm after the fall. She’s hoping she and her sons will be able to follow his path.
“That’s my goal. I want to be that old lady in the combine,” she said. “We'll see how that goes."
.webp?t=1762183428)
