Soaring fertilizer prices, supply chain disruptions challenge US farmers

Merry Lea Sustainable Farm switched from raising hogs to rabbits this year due to rising feed costs. They use the meat for staff and students hosted at the farm. From l to r: Goshen College assistant professor Ruth Mischler, Merry Lea farm manager Kaeli Evans, Merry Lea director of agroecology John Mischler.

Farmers switch crops, livestock plans to cope with price swings, product shortages

By Augusta Nafziger

When life gives you rising prices on feed, fertilizer, and oil — buy rabbits. “We don’t have pigs this year because they eat feed,” said John Mishler, director of agroecology at Merry Lea Sustainable Farm in Wolf Lake, Indiana. “But we did get rabbits because… they can be grazers.”

“We didn’t want to deal with the grain price volatility that we knew we’d have with pigs,” he said.

Mishler is not the only farmer who has switched up his plans this year. As the war in Ukraine and continued effects from the COVID-19 pandemic have resulted in inflation and supply chain disruptions, many farmers have been forced to adjust their usual crop rotations and the animals that they raise.

Pennsylvania farmer Daren Good is concerned about rising fertilizer costs and long delays to get new tractor tires.

Daren Good has been running his Lancaster County, Pennsylvania farm for 10 years. In addition to managing 40,000 cage-free laying hens, he owns a seed business and farms 250 acres of crops. Prices on agricultural products, particularly fertilizer, “skyrocketed” following the beginning of the war in Ukraine in late February, he said.

“We definitely saw a spike. There was clamoring that nothing was coming into the ports.”

John Benner serves as the agriculture and natural resources extension agent for Augusta County, Virginia. He first began hearing from farmers about rising fertilizer prices early in the winter of 2022. Prices climbed even further following Russia’s invasion of Ukraine.

“In addition to the commodities that Ukraine and Russia export, you also have the impact of Ukraine being an exporter of phosphates and potash,” Benner said. “That definitely contributed to the increase in fertilizers.”

The price hike has been dramatic. Potash, which is used to supply plants with potassium, had an average price of $879 per ton in the second week of June — up 94% from last year. Nitrogen-supplying fertilizers such as urea and anhydrous ammonia saw 81% and 111% increases, respectively.

Some Virginia farmers have responded to the high cost of fertilizer by cutting back on hay production, Benner said. On his own farm, Benner is planning for 25 acres less hay than last year. “In terms of the amount of acreage that producers had maybe planned to cut, fertilize, mow down and build up as far as hay, I think that’s reduced,” he said. “I would really attribute that to fertilizer prices being more or less 100% over what they were last year.”

Other farmers are more hesitant to reduce their fertilizer usage. “It’s a double-edged sword,” Good said. “I know if I pull back on my inputs, especially on the fertilizer side of things, I’m going to suffer on the other end. So, so far, I haven’t really pulled back on fertilizer.”

Fertilizer is not the only commodity that has soared in price as a result of the war. Good has “never seen wheat prices like this.”
Worldwide wheat prices for the month of May were up 56.2% from their corresponding value a year earlier. Good says he and many other farmers struggled to place contracts for their wheat crops in the spring. Buyers were hesitant to promise payment amidst market uncertainty.

Rising wheat prices come as a result of Russia and Ukraine’s prominent roles in the international wheat market. According to the United Nations Food and Agriculture Organization, Russia was the top global wheat exporter in 2021, with an 18% global market share. Ukraine was the sixth largest exporter, with a 10% global market share.

“Just like the Midwest is the breadbasket of North America,” Mishler said, “Ukraine has the same dark organic rich soils that the Midwest has; they’re the breadbasket of Europe. And so it was inevitable that there was gonna be an effect on grain prices.”
Because of the high prices of fertilizer and other agriculture products, other countries that might once have been able to double down on wheat production in order to make up for stalled Ukrainian and Russian wheat exports cannot meet the input costs to do so. In the United States, Benner says, some farmers are planting less wheat this year.

“The increase in market volatility really makes producers in Virginia, as well as other states, much more hesitant to put out a wheat crop,” Benner said.

Some farming supplies have not experienced a significant spike in cost but have become more difficult to find. When Good was inspecting his tractors in the spring, he decided to place an order for new tires — and was told that they would take 16 to 18 months to ship.

Some Virginia farmers are growing less hay this year due to the high cost of fertilizer. John Benner (left and above) is planning for 25 acres less hay on his farm than what he harvested in 2021.

“I felt like, hey, I’ve got to order ahead now,” he said. “That mentality is shifting… Now, we’re having to order way in advance, and that’s a foreign concept to me.” Benner noticed farmers in his area of Virginia experiencing similar supply chain delays, particularly when ordering ear tags for cattle identification.

“This year I think we put in our order a month ahead, and they really didn’t show up until calving season was just about over,” he said. “We had to go to a couple different retail outlets including our local co-ops and vet services to find the tags that we needed.”
Other products that Benner notes farmers have been struggling to obtain include implants, needles, syringes and even vaccine appointments for their animals.

“All sorts of other things were… at risk of just not being available, and that’s something that we are still continuing to learn and deal with,” Benner said.

As people around the United States and the world continue to experience the effects of inflation and supply chain disruptions from the war in Ukraine, Benner notes that many farmers have been struggling to make ends meet, as well.

“The higher prices that you’re paying at the grocery store for vegetables, fruits, meat, bread… the farmer isn’t quite seeing much benefit, if any, out of that,” he said. Good is excited to see how much his wheat crop will sell for in the coming weeks — but he is also aware of conditions in Ukraine that are boosting his income. “The thing I keep going back to is my good fortune is the direct result of somebody’s misfortune,” he said. “Unfortunately, that’s how economies oftentimes work.” As a farmer and an educator, Mishler struggles to make the right decisions for his farm while “still keeping in mind the folks in Ukraine.”

“Oftentimes we’re just told, hey, grain prices are high and that’s going to increase meat prices, right?” he said. “I would encourage folks to look into it and understand a little bit more about how everything functions.” Mishler also hopes that the past few months will motivate farmers to begin rethinking where they get their products and how they run their businesses.

“Let’s put our energy into re-imagining a future where this is less likely to happen, rather than trying to get back to some fabled, perfect state that never really existed.”

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