70% of US Farmers Can't Afford Fertilizer as Prices Jump 47%
Seven out of 10 American farmers can't afford all the fertilizer they need this year, according to a new survey of 5,700 farmers. Urea fertilizer prices have jumped 47% since late February due to shipping disruptions in the Strait of Hormuz.
A massive fertilizer shortage is crushing American farmers as ongoing conflicts disrupt global shipping routes. The American Farm Bureau Federation surveyed 5,700 farmers and found that 70% can't afford all the fertilizer they need for their crops.
Urea fertilizer prices have skyrocketed 47% since the end of February. The price surge stems from disruptions to the Strait of Hormuz, a narrow waterway where about one-third of the world's seaborne fertilizer trade normally passes.
Ship captains are reluctant to risk the dangerous passage through the strait, where drone strikes pose serious threats. Because fertilizer has less value than oil and gas, political and business leaders spend fewer resources keeping fertilizer shipments moving compared to energy products.
Nearly six in 10 farmers told surveyors their finances have gotten worse because of the fertilizer crisis. The shortage affects farmers' ability to grow enough crops, which could lead to food shortages and higher grocery prices for consumers.
Some fertilizer prices have jumped 40% in just a matter of weeks as supply chains remain disrupted.
Higher fertilizer costs mean farmers will produce less food, which could drive up grocery prices for everyone. About a third of the world's fertilizer normally ships through the blocked strait, creating shortages that hit American farms hard.
Watch for grocery price increases as farmers plant fewer crops due to fertilizer costs. Monitor efforts to reopen Strait of Hormuz shipping.
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