LANSING, Mich. (WLNS) – It is the middle of planting season for Michigan farmers, and farmer Jeff Sandborn says the closing of major international trade routes is driving up prices of fertilizer supplies like nitrogen and urea.
“Anything fuel related, nitrogen related especially, fuel costs just from last year to this year for me it went up I think almost double,” said Sandborn, who also serves as a Board Member with the Michigan Farm Bureau.
Sandborn is a fourth-generation cash crop grower out of Ionia County. He says the unexpected virtual closure of the Strait of Hormuz in the Middle East is a major complication.
“So for me, the way I figure my costs and my profitability, corn and wheat are the least margin right now and they’re the most intensive user of nitrogen,” said Sandborn.
Sandborn had purchased some supplies prior to the conflict with Iran, but says he’ll have to purchase more and prices are uncertain.
“Hopefully things calm down. The price of oil has come down. We’re off the peak from a couple of days ago, like 120 in the upper 80s. So, fertilizer will tend to follow,” said Sandborn.
Though farmers are not responsible for the price of their harvested crop, consumers could see what Sandborn calls a “trickle effect” of increased food prices.
“The rotation is set. It can be changed. If, say, I can’t get nitrogen to finish up, I’ll have to roll back on corn,” said Sandborn.
Sandborn predicts his corn crop will break even, though he could also see a loss.
“Some estimates I’ve seen is that urea prices are up more than 30% from mid-February to get it delivered here to Mid-Michigan,” said Theresa Sisung, commodity and regulatory relations manager at the Farm Bureau.
Sisung says corn and wheat farmers will likely experience the most sticker shock.
“For farmers, we have historically high input costs right now. Especially for row crop farmers, basically input costs are what decides whether or not they’re going to make a profit most years, and fertilizer costs are the biggest portion of their input costs,” said Sisung.
Sisung also says some farmers may choose to switch from corn to soybeans because soybeans need less fertilizer and could possibly yield a better profit.
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