War-driven fertilizer, diesel spikes threaten U.S. farmers at start of planting season

It’s planting season for many American farmers — a time that typically brings optimism about the year ahead. But a new war in the Middle East is already driving up costs and adding fresh uncertainty.

“I don't feel very positive about it,” said rice farmer Casey Smith.

Green blades of rice stand about 3 inches high in straight rows across Smith’s newly planted fields in Brazoria County, south of Houston.

“It's honestly nerve-racking. We put a very large sum of our own money into the crop last year, and we didn't get a nickel of it back,” he said. “So, it's very concerning.”

He worries about the tens of thousands of extra dollars he’s likely going to have to spend on his farm, with the roughly 25% increase in his fertilizer price and diesel prices surpassing $5 a gallon since the war started less than three weeks ago.

“We already had this planted when that (price increase) happened,” he said. “So, what do you do now? It's out of our control. We have zero control, and there's zero chance that our yield will make up that extra expense. There's zero chance.”

Further north in the Texas Panhandle, Dee Vaughan grows corn, grain sorghum, wheat, and cotton.

“We are second-generation Texas farmers. My grandparents farmed in Oklahoma,” he said.

He’ll plant his corn, cotton, and grain sorghum later this spring. He’s also concerned about how the increased cost of fertilizer and diesel will hit his bottom line. “I have no way of passing the cost on. Our corn is priced in a global marketplace,” he said. “I just have to take it on the chin that way.”

He said he may cut back on fertilizer use or delay repairing or replacing some of his equipment. “You just have to kind of roll with the punches.”

He’s better situated financially to weather this storm, he noted, but he wonders about the younger generation of farmers.

“Some of them may not make it. And those of us that are 60-plus that are looking at ‘Who's going to farm this ground when we're gone?’ That's what we have to be concerned about,” he said.

Around the world, farmers are feeling the impacts of the war. The Middle East is a major fertilizer-producing region, according to Julia Meehan, who tracks the fertilizer industry for ICIS, a commodity intelligence provider.

“There is a huge volume that's not making it through to the customer,” she said. “This is all at a time when we are in peak season for application — for the U.S., for Europe, for India.”

And she said this could ultimately reduce demand for fertilizer.

“If this conflict continues in the Middle East, I think these prices will go higher. But at what point will then the farmer say, ‘enough is enough, we can't afford this anymore’?” she said.

Cutting down on fertilizer would hurt crop yields, and that could eventually trickle down to higher food prices for consumers.