The American Farm Bureau Federation (AFBF) is raising concerns relating to fertilizer supply and pricing in the wake of military conflict in Iran. On a call with media earlier this week, AFBF President Zippy Duvall, South Carolina Farm Bureau President Harry Ott, AFBF Vice President of Public Policy and Economic Analysis John Newton and AFBF Economist Faith Parum provided a briefing related to these two concerns. Ott shared concerns regarding potential price gouging of fertilizer, stored in domestic warehouses, saying, “Tuesday of last week I called my fertilizer distributor to get a price and some fertilizer delivered and he said I’m sorry we will not price or deliver fertilizer until we see how this shakes out. That meant that I was already being charged $150 to $200 a ton more urea fertilizer that was already in his warehouse and that’s part of the issue that a lot of farmers are trying to grapple with. We understand that the replacement cost to refill that warehouse is going to be higher because of the supply and demand, but we really don’t understand why we are being charged $150 to $200 premium for what they already had purchased in their warehouse. On top of that, liquid nitrogen, 32% nitrogen that we need is up $50 to $70 a ton higher already when they had their tanks already full.”
Duvall explained that producers may not be able to apply fertilizers this season due to the inability for ships to travel through the Strait of Hormuz. Duvall said, “we’re being told that many of our farmers haven’t pre-ordered their fertilizer and paid for it and may not even obtain the fertilizer that they’re going to need during the season or for spring planting. That’s why this situation is so serious and it’s not just a farm issue, it’s a food security issue and an economic issue for the entire country.”
Duvall also shared the actions that AFBF is requesting including utilizing the U.S. Navy to provide safe maritime transportation of fertilizer shipments through the Strait of Hormuz, for the administration to maintain open shipping lanes, improve domestic transportation capacity for fertilizer shipments, for the administration to consider relief from duties and transportation barriers, and for the administration to maintain and address insurance and financial barriers for fertilizer shipments. Duvall also said that AFBF is asking for companies that deal with fertilizer to “avoid price gouging or optimizing their pricing that would further strain our farmers who are already under tremendous financial pressure.”
Audio Reporting by Dale Sandlin for Southeast AgNet.