An overwhelming majority of America’s farmers who responded to a nationwide survey said they cannot afford to purchase enough fertilizer to get them through the year.
Conducted by the American Farm Bureau Federation April 3-11, the survey showed 70% of respondents said fertilizer was so expensive they would not be able to buy all they need.
The percentage who pre-purchased fertilizer varied significantly by region.
More than 5,700 farmers, both Farm Bureau members and non-members, from every state and Puerto Rico took the survey, a Farm Bureau release said. Farm Bureau economists analyzed the results in the latest Market Intel.
SOME REGIONAL DIFFERENCES
The analysis revealed that almost eight in 10 farmers in the southern US said they couldn’t afford all needed supplies this year, followed by the Northeast and West at 69% and 66%, respectively, compared to 48% of the farmers in the Midwest.
Just 19% of farmers in the South prebooked fertilizer purchases in advance of planting season, the Farm Bureau said. In the Northeast, only 30% of farmers prebooked, followed by 31% in the West and 67% in the Midwest. Even with higher pre-booking rates, almost one in three Midwestern farmers still reported entering the season without securing all of their fertilizer needs.
WAR INTERRUPTIONS
The Middle East conflict sent fertilizer and fuel prices soaring, the Farm Bureau said. The closure of the Strait of Hormuz was keeping critical fertilizer supplies and crude oil from reaching global markets, putting a squeeze on supplies around the world.
“Spring planting decisions depend heavily on access to fertilizer and diesel fuel, both of which have been impacted by geopolitical risks that have disrupted global markets,” the Farm Bureau’s Market Intel stated.
“Since the escalation of tensions in the Middle East, nitrogen fertilizer prices have risen more than 30%, while combined fuel and fertilizer costs have increased roughly 20% to 40%. Urea prices have increased by 47% since the end of February, marking the largest month-to-month percentage increase in the price of urea. These increases are occurring when many producers were already facing tight margins for many consecutive years.”
Many of the farmers surveyed said they will forego applying fertilizer this spring hoping prices will return to an affordable level later in the growing season, the Farm Bureau said.
AFBF President Zippy Duvall said, “The skyrocketing cost of fuel and fertilizer is creating more economic hardships for farmers who have already endured years of losses. Without the necessary fertilizers, we’ll face lower yields and some farmers will reduce acres altogether, which will impact food and feed supplies.
“It’s too early to know how this will affect food availability and prices in the long run, but it’s a warning light that we’ve shared with leaders in Washington. We look forward to working with them to find solutions so farmers can continue to feed families across America.”
According to the survey, 94% of respondents reported their financial situation had worsened or remained the same since last year, while only 6% reported improvement.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $245.55 per cwt to $250.44, compared with last week’s range of $235.00 to $248.29 per cwt. FOB dressed steers and heifers went for $386.05 per cwt to $394.58, compared with $373.20 to $388.53.
The USDA choice cutout Thursday was down $0.41 per cwt at $381.57 while select was down $0.10 at $378.48. The choice/select spread decreased to $3.09 from $3.40 with 82 loads of fabricated product and 22 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $446.47 per cwt, and 50% beef was $186.42.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.02 to $1.15 a bushel over the May corn contract, which settled at $4.48 1/2, down $0.02 3/4.
Twenty steer live cattle contracts were tendered for delivery Thursday. Three more steer live cattle contracts were retendered for delivery at one.
The CME Feeder Cattle Index for the seven days ended Wednesday was $379.09 per cwt, up $3.63. This compares with Thursday’s Apr contract settlement of $373.07, down $0.42.