Russia’s war in Ukraine creates uncertainty for American farmers

Spring planting season has begun for many farmers, and although their harvest prices are higher than they’ve been in yearsthe war in Ukraine is costing farmers here in the US Farmers are being hit across the board by price increases – in fuel prices and equipment – but especially fertilizer.

Russia is the world’s second largest producer of many key crop nutrients in a typical year, and as the war has affected access to key ports, some US producers are struggling to find what to buy, according to Nick Paulson. associate professor in Agricultural Economics at the University of Illinois.

“It’s not just the price of fertilizer that becomes a concern and in some cases it’s its literal availability,” Paulson said. “A lot of the combat has a direct impact on the ability to get ships in and out.”

Difficulty buying fertilizer — which the USDA says accounts for more than a third of operating costs for corn and wheat farmers — has been a major stressor.

Mark Birdsall, a North Dakota farmer who is also commissioner general of the North Dakota Wheat Commission, estimates that medium-sized farms in his state will pay $137,000 more to fertilize than last spring. And Birdsall said he and the farmers he represents won’t necessarily reap the benefits of high grain prices.

“You have to understand that in western North Dakota, especially the western half of North Dakota, we’ve been in a pretty severe drought for two years, and high dollar prices for raw materials don’t mean much if you don’t produce the bushels,” Birdsall says.

Fertilizer prices had already tripled in 2021 due to a variety of pandemic factors, but soared by more than 40% in the month after the fighting in Ukraine began, reaching record highs, according to Green Markets, a Bloomberg Company.

Since Russia invaded in late February, farmers’ confidence in the agricultural economy has fallen to levels not seen since the early days of the pandemic, according to Purdue University’s Ag Economy Barometer, published this week.

The researchers, who surveyed more than 400 American farmers monthly for nearly six years, found that farmers are concerned about the impact of the war on their production costs. They think they will be worse off this year than in 2021 – over 90% expect their operating expenses to rise 20% or more this year and anticipate that higher crop prices will not be enough to cushion their profits .

Marty Marr, president of the Illinois Corn Grower Association, said, “It’s amazing how one event can change so much for so many people.”

Birdsall said he and other farmers in his state are trying to isolate themselves from risk by swapping some of their acres of wheat for less fertilizer-intensive crops like soybeans or peas.

Justin Knopf, a fifth-generation Kansas farmer who grows winter wheat and soybeans, bought his fertilizer soon after the invasion, figuring prices would rise. Though Knopf hopes for a ceasefire, he fears the price of his wheat could drop dramatically before he has a chance to sell his crops that cost him more to grow.

Knopf said the war “put everything on the line” — increasing not only his financial risks, but also his sense of responsibility for achieving good returns this year.

“Russia and Ukraine account for as much as 30% of global wheat exports worldwide, and as a wheat farmer in central Kansas, where we have a climate and soil similar to Ukraine, I am struck by the amount of extra responsibility or emotional responsibility that I feel.” said Knopf. “It has become more important to me that I do everything I can to grow and take care of a good crop.”

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