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The latest news from every corner of the state, including policy emerging from Missouri's capitol.

Midwest farmers are struggling with higher fertilizer prices

Soybean fields like this one in north Central Missouri photographed in 2021 will be more expensive to fertilize this year due to higher prices.
Jonathan Ahl
St. Louis Public Radio
Soybean fields like this one in north Central Missouri photographed in 2021 will be more expensive to fertilize this year due to higher prices.

Making money farming is always a risky proposition, but a giant spike in fertilizer prices this year will make it even more difficult.

The cost of phosphate and nitrogen-based fertilizers, the kinds that are applied to corn, soybean and hay fields, are seeing jumps of 80% to 200%.

Manufacturers are blaming a variety of factors for the jump. Raw material prices are up, and natural gas, also used to make fertilizer, is more expensive. Hurricane Ida shut down production in the U.S. last year, while power outages in China cut back manufacturing capacity there.

“Prices are all higher, it’s just crazy,” said Bill Taylor, who farms 2,500 acres of corn and soybeans in central Missouri near Sedalia. “Guys like me are talking about reducing the amount we apply, or maybe delaying to see if prices come down. It’s going to mean lower profits, or not even being able to break even.”

Yet fertilizer company officials say they don't expect the price increase to have much effect on sales.

"Our own belief is farmers like to farm, and they are not going to sacrifice yield by not fertilizing," said James "Joc" O'Rourke, CEO of Mosaic Co., on a recent call with industry analysts.

Agricultural economist Gary Schnitkey at the University of Illinois disagrees. In a market analysis report, he wrote, “given the high fertilizer costs, reducing fertilizer applications should be a high priority at this point.”

Schnitkey’s analysis also predicts the higher fertilizer prices will lead to an increase in crop prices.

“Corn prices likely will adjust such that corn and soybeans have the same relative profitability,” he wrote.

If crop prices go up, that could mean higher food prices, especially for meat, as many of the affected commodities end up as livestock feed.

Farmers are going to have to make difficult decisions on how to cope with the increase.

Danny Young, vice president at FCS Financial in Sedalia, a rural bank that works with farmers, said he is extending lines of credit to farmers who haven't needed to borrow money in years.

He doesn’t envy their position.

“It is a leap of faith because you spend this extra money on fertilizer, and you hope you have a good crop next year and prices are good to pay that operating loan back,” Young said.

Farming is always a leap of faith, said Taylor, but this year maybe more so.

“There is still a lot of penciling to do. If you don’t raise the crop, what do you do with all these excess inputs? It’s going to make it hard on these younger guys, too, and the guys who are already struggling,” Taylor said.

While the industry and agricultural economists agree the reason for the higher prices is understandable, not everyone is convinced.

The Family Farm Action Alliance wrote a letter to the antitrust division of the Department of Justice in December, asking for an inquiry into the fertilizer sector on the suspicion of anticompetitive practices.

“Out here in farm country, we can tell that something stinks about this fertilizer deal,” said Joe Maxwell, president of Family Farm Action Alliance. “The DOJ has the power and the authority to investigate fully, and American farmers deserve nothing less.”

The Department of Justice has not yet responded to the request.

Follow Jonathan on Twitter: @JonathanAhl

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Jonathan is the General Manager of Tri States Public radio. His duties include but are not limited to, managing all facets of the station, from programming to finances to operations. Jonathan grew up in the south suburbs of Chicago. He has a B.A in music theory and composition from WIU and a M.A in Public Affairs Reporting from The University of Illinois at Springfield. Jonathan began his journey in radio as a student worker at WIUM. While in school Jonathan needed a summer job on campus. He heard WIUM was hiring, and put his bid in. Jonathan was welcomed on the team and was very excited to be using his music degree. He had also always been interested in news and public radio. He soon learned he was a much better reporter than a musician and his career was born. While at WIUM, Jonathan hosted classical music, completed operations and production work, was a news reporter and anchor, and served as the stage manager for Rural Route 3. Jonathan then went to on to WIUS in Springfield where he was a news anchor and reporter covering the state legislature for Illinois Public Radio. After a brief stint in commercial radio and TV, Jonathan joined WCBU in Peoria, first in operations then as a news reporter and for the last ten years of his time there he served as the News Director. Jonathan’s last job before returning to Tri States Public Radio was as the News Director/ Co-Director of Content for Iowa Public Radio. During Jonathan’s off time he enjoys distance running, playing competitive Scrabble, rooting for Chicago Cubs, listening to all kinds of music and reading as much as he can. He lives in Macomb with his wife Anita and children Tommy and Lily.