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The war with Iran is raising prices for more than just gas. Now, farmers are grappling with the rising cost of fertilizer. The cost of fertilizer has been climbing since the start of the war due to disruptions in the Strait of Hormuz, which is a main passageway for urea, the main nitrogen source used in fertilizer. This comes as farmers across the nation enter the peak season to fertilize their fields for spring. According to Johnny Gunsaulis, an Arkansas agriculture extension agent, the cost of fertilizer has increased to around $790 per ton from around $565 per ton before the war began. “There’s some fear that they’re going to go up quite a bit more,” Gunsaulis said. “I think everyone’s just hoping that this is not going to be a long-term deal.”Combined with the rising cost of diesel, this makes production and transportation more expensive for farmers. Tomas Jandik, a professor of finance at the University of Arkansas, said this will likely lead to higher grocery prices.”I think that grocery prices are destined to increase, at least temporarily, even if war ended today,” Jandik said. “It takes some time for the supply chain to transfer all the increased cost to the final customer. It’s simply the inevitable consequence of energy costs massively increasing.”He said grocery prices might not rise immediately, but once they’re here, they’ll stick around for longer. “Prices of groceries and goods that depend on cost of transportation all rise slower, but they’re a little bit more persistent than changes in prices of crude oil, gas and diesel,” Jandik said. Gunsaulis said the price of chicken and beef could rise first, as they’re the top two agricultural products in Benton County, Arkansas. “It will be more expensive to produce and then also to transport to the market,” Gunsaulis said. “Now, if that cost comes out of the farmer’s pocket or if it comes out of the consumer’s pocket, I can’t say.”
The war with Iran is raising prices for more than just gas. Now, farmers are grappling with the rising cost of fertilizer.
The cost of fertilizer has been climbing since the start of the war due to disruptions in the Strait of Hormuz, which is a main passageway for urea, the main nitrogen source used in fertilizer. This comes as farmers across the nation enter the peak season to fertilize their fields for spring.
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According to Johnny Gunsaulis, an Arkansas agriculture extension agent, the cost of fertilizer has increased to around $790 per ton from around $565 per ton before the war began.
“There’s some fear that they’re going to go up quite a bit more,” Gunsaulis said. “I think everyone’s just hoping that this is not going to be a long-term deal.”
Combined with the rising cost of diesel, this makes production and transportation more expensive for farmers.
Tomas Jandik, a professor of finance at the University of Arkansas, said this will likely lead to higher grocery prices.
“I think that grocery prices are destined to increase, at least temporarily, even if war ended today,” Jandik said. “It takes some time for the supply chain to transfer all the increased cost to the final customer. It’s simply the inevitable consequence of energy costs massively increasing.”
He said grocery prices might not rise immediately, but once they’re here, they’ll stick around for longer.
“Prices of groceries and goods that depend on cost of transportation all rise slower, but they’re a little bit more persistent than changes in prices of crude oil, gas and diesel,” Jandik said.
Gunsaulis said the price of chicken and beef could rise first, as they’re the top two agricultural products in Benton County, Arkansas.
“It will be more expensive to produce and then also to transport to the market,” Gunsaulis said. “Now, if that cost comes out of the farmer’s pocket or if it comes out of the consumer’s pocket, I can’t say.”
