Wisconsin farmers feel squeeze as fertilizer prices surge 25% amid Strait of Hormuz disruptions

MADISON, Wis. (WMTV) -Fertilizer prices have risen 25% since the end of February, and Wisconsin farmers are now facing the financial pressure as spring planting season begins.

U.S. military tensions with Iran have disrupted access to the Strait of Hormuz, one of the world’s most critical shipping lanes, cutting off three of the top 10 global fertilizer exporters: Iran, Qatar and Saudi Arabia.

‘The worst time of the year’

Josh Linville, vice president of fertilizer at StoneX Financial Services, said the timing compounds the problem for American farmers.

“This is the worst time of the year because again, we are bringing in those last-minute imports in order to meet our spring needs,” Linville said.

Linville said the disruption to the Persian Gulf has effectively removed key supply sources from the market.

“Iran, Qatar and Saudi Arabia — and as of right now, those three are completely gone,” Linville said.

Wisconsin farmers absorbing the losses

Doug Rebout, president of the Wisconsin Soybean Association, said farmers are operating with no room to absorb the added costs.

“There’s really no profit margin in there. So we’re just extending that loss margin for the farmers that are buying fertilizer right now,” Rebout said.

Rebout said suppliers are warning that recently purchased orders may still be fulfilled, but new buyers face uncertainty on both availability and cost.

“They’re saying people that bought it before will get their product, but if you’re buying it right now, they can’t guarantee that you’ll get that. And the ones that are giving prices, those prices have gone up significantly,” Rebout said.

Rebout said farmers who cannot secure fertilizer at current prices may face a difficult choice heading into the growing season.

“If you don’t, you’re either going to have to pay a lot more to get that, or you’re going to have to go without, which will mean that your yield at the end of the year might not be as good if you’re not putting on that fertilizer,” Rebout said.

Rebout said farmers are already adjusting their application practices in response to elevated prices.

“When we’re out there working, we’re not using what we need to because the price of fertilizer is high,” Rebout said.

Rebout framed the issue in broader terms during his Washington visit.

“Food is a matter of national security. So to me, farmers are a matter of national security — we’re just trying to provide that safe and cost effective food supply for you,” Rebout said.

Potential impact on grocery prices

If fertilizer costs continue to climb, experts said consumers could eventually see the impact at the grocery store if crop yields fall short of expectations.

Linville said farmers and suppliers should focus on local conditions as they navigate the uncertainty.

“Talk to your supplier. Talk to the person you do business with. Get a sense for what’s happening in your local back door. You’ve got to be worried about the world, but you’ve got to be more worried about what’s at home,” Linville said.

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