We are paying more for gas now but farmers are facing higher prices as well.
On a cool Thursday morning, sugar cane farmer Bobby Morris surveyed the soggy fields surrounding his Port Allen workshop and worried. Morris, a fifth-generation farmer whose close-cropped gray hair belies his 42 years, is facing a year unlike any other. Coronavirus, and now the war in Ukraine, have propelled prices for fertilizers and fuel, among the biggest annual expenses for farmers, higher than he’s ever seen. Prices for nitrogen, phosphate and potash, the three most important fertilizers farmers use to maximize their crop yields, have roughly doubled since last year. Farm diesel has jumped by more than a dollar per gallon, and some farmers are reporting being charged $2 per gallon more than they were in 2021. It’s forced Morris, who farms about 3,200 acres in West Baton Rouge Parish, to adapt in ways he’s never had to before. “The price of everything is through the roof,” said Morris. “It’s a scary time.”nola.com
This is a problem state wide and probably nation wide as oil costs are going up.
Those concerns are reverberating around Louisiana’s agriculture industry this spring. For many Louisianans, the war in Ukraine is an image on their TV screen or a small blue and yellow flag appended to a social media handle. For farmers, the missiles landing near Kharkiv or Kyiv are sending ripples through their fields. Russia is a major oil exporter and the world’s biggest exporter of fertilizer, including nitrogen, phosphate and potash, key elements in sugar cane, corn, cotton and rice farming. The war and the resulting international sanctions imposed by the U.S. and Western allies have thrown markets for those supplies into turmoil. Andy Brown, who tracks farm economics for the Louisiana Farm Bureau Federation, a farmer advocacy group, said that when you pile the invasion’s impact on prices on top of supply chain complications brought on by the pandemic and chemical shortages in China and Europe, it creates an ominous picture. Louisiana’s biggest crops are soybeans, corn, sugar cane, rice and cotton. Sugar cane, rice and cotton are known as “high-input crops,” which means they require farmers to apply tons of fertilizer and pesticides every year. They also require lots of fuel for the tractors that farmers use to tend the fields. Cutting back on these inputs, especially the fertilizers that replenish the soil, can reduce yields that drive down the size of the crop that can be sold at harvest. Louisiana farmers could be hit especially hard by the price spikes, Brown said. “It’s brought into focus here probably more than other states,” he said.
Prices are far higher than the past and will be keep going up as other markets for the fertilizer and nutrients have to be found.
Nitrogen, essential to sugar cane, corn and cotton, is retailing for $700 per ton in 2022, after going for under $350 per ton last year, according to information from the LSU Ag Center. Phosphate, another key fertilizer, has gone from about $360 to about $600 per ton over the same span. And potash, from $336 to $695 per ton, Ag Center data shows. Those are the highest prices in roughly decade. At the same time, fuel costs are also climbing. Last year, diesel was under $2 per gallon. This year, many farmers are being quoted closer to $4 per gallon of fuel, a heavy cost when you buy it 8,000 gallons at a time. “It’s just not pretty, man,” said Fred Zaunbrecher, who farms rice, soybeans and crawfish in Rayne. “This is probably one of the most anxious years that we are facing.” Zaunbrecher said he was tightening his belt. He’s already put down phosphate and potash for his rice fields, but in smaller amounts. “We put down two-thirds of the fertilizer that we put last year, but at the same cost,” he said. He’s also holding off on putting down any nitrogen just yet. “It’s a big expense,” he said. “If you have it, it’s good, but if you don’t, it’s going to be expensive.” “It’s a perfect storm,” the Farm Bureau’s Brown said. “Obviously COVID supply chain issues already had put a strain on these markets and on the timing and labor costs associated with those.” Market forces at play even before the pandemic have also contributed. Many fertilizer, pesticide and other agricultural chemical producers have gone through consolidations in recent years. “You’ve got a few really big players and so that’s going to raise prices naturally,” Brown said. “Now you add a war in some pretty big markets.”
As a partial offset the crops are selling for more.
Crop prices have crept up, but not on the same trajectory as the prices of inputs, Brown said. Marshall Hardwick, who with his brother Mead runs an 8,000-acre farm in Tensas Parish of which about 1,100 acres is corn, said the higher corn prices won’t benefit him as much as it may seem. He, like many farmers, has already agreed to sell most of his crop at lower prices, a common practice among farmers. “We’ve booked about 70% of our anticipated crop,” he said this week. Hardwick has about 4,000 acres of soybeans and 2,500 acres of cotton as well. Prices for corn and cotton are at some of their highest ever, he said. But they still haven’t kept up with his costs. “In 2022, we are looking to spend about 50-65% more than we did in 2021,” he said. “Our input costs are rising so quickly that any kind of profit is being evaporated.” Like Morris, Hardwick said certain herbicides and pesticides have gotten more difficult to find. “A lot of this stuff is in short supply,” he said. “Everything’s limited.” Hardwick said his fields probably won’t look “as neat and tidy” as they have in the past. That shouldn’t lower his yields this year, but it could create problems down the road if he’s forced to continue to defer maintenance. “We are pretty nervous about 2023,” he said. “Those may be some really difficult times for farmers.”
On a positive side, maybe they can discover natural ways to help the crops rather than with chemicals. This is collateral damage that shows how interconnected the world is today.