‘Up in the air.’ Iran war price hikes stretch Centre County farmers thin
Charlie Dotterer needed about 100 tons of nitrogen fertilizer to treat the crops this summer on his family’s Mill Hall dairy farm. That was before the Iran war broke out a month ago.
In the week or so since, Dotterer said, a $350 ton of 28% pure nitrogen fertilizer rose to $440, even with a discount from his retailer. By Wednesday, that same fertilizer was trading for $484, on average.
“Conservatively, we may meter the nitrogen out to make it stretch,” said Dotterer, the farm’s crop manager. He ended up buying half of what he needed for the summer, though the farm must grow enough corn to feed the cows no matter what.
Central Pennsylvania farmers are facing soaring fertilizer and diesel costs as they enter the spring growing season — a direct result of the war in Iran. A key waterway for nitrogen and fuel, the Strait of Hormuz, has been blocked as the U.S. and Israel trade attacks with Iran, leading to uncertainty in the market. Farmers and fertilizer retailers alike are in the dark as to how high prices might go in the near term.
“Every day is different,” Todd Woomer said after treating his field outside Hublersburg, a young grandchild riding alongside in an enclosed tractor. Woomer, who usually buys fertilizer shortly before the growing season, said he had difficulty getting a price from his fertilizer retailer.
“We’re sort of up in the air,” he continued.
In a self-congratulatory, and at times contradictory, address to Americans Wednesday night, President Donald Trump claimed of the war that “we are going to finish the job, and we’re going to finish it very fast.”
But even if the fighting were to end soon, farmers could to feel the effects throughout the growing season.
PA farmers are trying to adapt, but flexibility is limited
Woomer, like many farmers, has adjusted his growing plans to stave off losses. He said he’d usually grow 165 acres of corn and 100 acres of soybeans. This year, because corn requires increasingly expensive nitrogen fertilizer, 125 acres are going to corn, and 120 to soybeans. Woomer is also incorporating more nutrient-rich manure into his crop treatment.
Dairy operations like Dotterer’s, common in Central Pennsylvania, have less flexibility to move away from corn. That means their margins will likely shrink due to the war.
“A lot of their crop and portfolio is around what the dairy cows need to eat, and it’s more of a Midwestern thing where those farmers are just purely producing commodities,” said Charlie White, a nutrient management specialist at Penn State Extension.
White explained that nitrogen fertilizer is especially susceptible to price disruptions. Producing it is energy intensive, meaning soaring fuel costs will raise the price of fertilizer. Disruptions to shipping logistics also raise prices in the global market, even if the fertilizer is produced domestically.
Given the uncertainty surrounding the war, speculators have driven up fertilizer prices even more, longtime retailer Fritz McGrail said.
Some farmers, crop consultant Alan Berry said, might end up treating less corn in the near term and wait until summer, in hopes of securing better prices on nitrogen fertilizer.
“But there’s still also risk that the price might even go up,” said Berry, whose consulting business runs out of Beech Creek, “so that’s a roll of the dice.”
McGrail likewise likened the current market to gambling.
“I had a situation this morning where I had quoted a guy for some fertilizer back on the 15th of February, and he finally got it delivered here the other day, and it went up $85 a ton,” McGrail said Tuesday. “Now what do you do?”
Berry suggested that farmers get a soil test, which can be as low as $20 for a 20-acre field. The test, he said, will tell the farmer whether there are already enough nutrients in the ground for non-nitrogen consuming crops, so more money can be allocated to buying nitrogen fertilizer.
“It’s simple math,” he said. But for those without nutrient-dense soil, their fortunes are at the whims of an increasingly volatile market.
“The medium- and smaller-size farmers,” which are more common in this region, “they might be just dealing weeks in advance,” White said. Larger farms, he noted, likely locked in their prices well before the war.
But not all farms could afford to lock in a season’s fertilizer needs in advance, Berry said. The farm economy was unfriendly before the war.
Farmers were already in a tough market
The squeeze on farmers comes at an inopportune moment, several industry insiders said.
Trump’s trade wars have resulted in higher prices for goods farmers import. Major fertilizer exporters Russia and Belarus have been sanctioned for almost four years due to their invasion of Ukraine (the White House eased Belarusian sanctions last month after attacking Iran). China, another major exporter, opted to keep its fertilizer for itself, while India and South America are consuming more than ever.
Domestically, the price of milk has been down for the better part of a year. Relatively thin margins for farmers are likely to get thinner as a result of the war.
“There’s a lot of concern in the near future that it is going to be a pretty costly spring,” said Chris Hoffman, president of the Pennsylvania Farm Bureau. His organization, the commonwealth’s top agriculture lobby, has been asking lawmakers for relief in any form, be it lifting the fuel tax, juicing the commodity market (such as by allowing more corn-based ethanol fuels) or direct aid, such as the $12 billion the Trump administration gave to farmers last year in the wake of the president’s tariffs.
“We got the $12 billion, but that wasn’t enough, right?” Hoffman said. “That was more of a Band-Aid, but we need more to try to help us through some of these tough times.”
A spokeswoman for U.S. Rep. Glenn Thompson, the House Agriculture Committee chairman, said in a statement the Howard Republican “continues to emphasize the importance of market-based solutions in maintaining a stable agricultural economy,” and the farm bill, which is working its way through Congress, is “progress toward that goal.”
The spokeswoman, Caroline Leach, added Thompson was “encouraged” by the Trump administration’s waiver of domestic shipping rules to offset some of the gas price increases brought on by the war.
War’s effects on farms could outlast the fighting
Farmers, especially smaller ones, are preparing for the growing season by purchasing supplies at elevated prices. But they’re still at the mercy of Mother Nature and the market when they go to sell later this year.
“It’s a little scary to think about, ‘OK, I’m gonna put these, these components in the ground, from fertilizer to seeds and all this other stuff, and use the equipment to burn up the fuel, to get it in, because we’ve got to have it,” Hoffman said. “And then you’re hoping that trade and the policies that are there are going to create an opportunity for us to be successful with high enough commodity prices that will pay the bills.”
Farmers who are planning lower crop yields due to spiking production costs may have to raise prices, which could eventually be passed onto consumers.
“If we don’t provide supply because of reduced production by a shortage of fertilizer to grow that production, yes, then from the demand side, the price will have to go up,” Dotterer, the crop manager, said.
Berry said farmers have to sell their crops at lower wholesale rates regardless.
“The typical farmer buys everything at retail and sells everything they grow at wholesale, which is ass backwards from every other business in the world, where they buy everything in wholesale and sell retail,” Berry said.
He stressed that higher grocery prices in the wake of the war would largely be due to retailers, and that farmers are unlikely to see much of a boost from higher food costs.
A prolonged conflict could make next year’s growing season painful. If the Strait of Hormuz were to be blocked into the summer and fall, when farmers begin locking in fertilizer prices for the spring, “it will have more of a more of an impact on crops that we grow in 2027,” Berry said.
McGrail, the fertilizer retailer who has been in the business since 1967, said he is hopeful an end to the war will return the market to normal.
“The key thing here is to manage it until we get through this crisis,” McGrail said. “Once we get vessels moving again, we’re going to see the price go back down as fast as it went up.”
