Why Should Delaware Care?
In recent months, rising operating costs and low sale prices have put significant financial strain on Delaware crop farmers. Fertilizer and fuel price increases spurred by the ongoing war in Iran have made the situation more challenging for local farmers, forcing them to make difficult choices about growing strategies heading into this year’s planting season.
Amid already razor-thin profit margins, fertilizer and fuel price increases caused by the war in Iran are putting more stress on Delaware farmers heading into the spring planting season.
While some Delaware farmers were able to forward contract their fertilizer and fuel cost, meaning they locked in prices months ago, those who waited will be forced to endure costs that have nearly doubled since the war began in late February.
In an industry that is already volatile, with corn and soybean prices low and operating costs for farmers high, many Delaware farmers say they don’t have much room to weather the costs of war-induced price hikes.
“The prices aren’t working,” Dover-area farmer Paul Cartanza told Spotlight Delaware. “Every time something happens, the farmers are the first to feel it.”
Fuel and fertilizer costs make up between 18% and 20% of most farmers’ total operating costs, said University of Maryland agricultural economics researcher James McDonald. While exact prices depend on the type of fertilizer, prices have increased by somewhere between 15% and 70% since the war started.
The price spikes stem from the Iran government’s shutdown of the Strait of Hormuz — a critical sea passage for oil, fertilizer ingredients, and other exports from the Middle East — in retaliation to American and Israeli bombings of the country. The fertilizer price increases, specifically, are a result of the blockage of nitrogen and phosphate materials, which are two key fertilizers for American farmers.
The Trump administration has said it is attempting to increase fertilizer imports from Venezuela, in order to offset the impacts of the lacking Middle Eastern supply.
But at a time when corn prices have dropped precipitously to $4 a bushel and soybean prices to $10.20, leaving farmers with less upside potential on their crops, Delaware farmers say they will need to turn to strategies like applying less fertilizer to fields and not tilling the crops in order to get by.
Not tilling, or growing crops without turning over the soil beforehand, saves on costs because farmers don’t have to pay for as much fuel to run their tractors and do the tilling.
Farmers say these fertilizer and tilling changes might decrease crop outputs, particularly if it also ends up being a bad weather year. But many do not see an alternative when fuel prices are soaring by 150%.
If crop yields are lighter as a result, it could also raise food prices later in the year – potentially leading to another burden for consumers.
“You don’t have much of a choice,” Harrington-based farmer Dave Marvel said. “This is a major issue. When fuel is up, everything is up.”
Adding to the challenging circumstances, farmers say, is the uncertainty as to when the war might end, and how long it could take for fuel and fertilizer prices to readjust.
“The fertilizer impacts might last for quite a long time,” said McDonald, the university researcher.” They’ll be facing higher prices, most likely well into the future.”
Worsening the outlook
Even before the war in Iran skyrocketed input prices for the season, Delaware farmers were worried about scraping by this year with low prices and high input costs.
Jim Minner, a Felton-area corn and soybean farmer, told Spotlight Delaware in early March that he had adopted a mindset of “just get by” because of crop prices being so low and machinery costs so high in recent years.
A one-time farm bridge assistance payment from the federal government earlier this spring gave farmers a bailout amid the challenging circumstances, which many said they put toward bills they hadn’t been able to pay, or small machinery upgrades that they had been meaning to do.
Now, though, the fertilizer and fuel price landscape is adding another layer of uncertainty to an industry in which some are questioning its sustainability.
The price hikes also come just as Delaware farmers are beginning to plant their crops, which will begin in mid-April and continue through June for most farm operations.
Minner, who farms about 550 acres across Kent County, said he was able to forward contract most of his fertilizer this past fall, and pre-buy about 1,300 gallons of diesel at $2.60 per gallon – substantially lower than the current $5.79 per gallon that he’s seen at the pump.
While the early contracting has eased some of his financial stress, Minner said, he is still worried about having to refuel his tractor and combine tanks, and purchasing more nitrogen for his corn crops in June.
“You can cut back [on fertilizer] a little bit, but when you cut back, you’re going to cut yield back,” he said.
Smyrna-area farmer Jonathan Snow similarly said that he had already locked in the prices on some of his fertilizer before the war began. He will need to assess as the spring progresses whether he can get by with less fertilizer, or if his yields will suffer too much, depending on how wet or dry the weather has been.
Cartanza, the Dover-area farmer, has a different approach.
Cartanza did not forward contract his fertilizer this season, so he anticipates having to cut back on fertilizer and “rob the ground” of its existing nutrients, for which he said he might pay the price in future years.
Cartanza also said he intends to lean into the no-till or minimum-till crops, which allows him to save on fuel for his machinery and limit the amount of fertilizer he uses.
As Delaware farmers say they are keeping their heads down, trying to cut costs when possible and re-assess as the season goes on, McDonald said he anticipates the price impacts could persist for at least another six months.
Even if the war ends, or the Strait of Hormuz reopens, it will take significant time for facilities to repair from damages they have suffered and restart operations, and for prices to readjust, he said.
Maggie Reynolds is a Report for America corps member and Spotlight Delaware reporter who covers rural communities in Delaware. Your donation to match our Report for America grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by visiting https://spotlightdelaware.org/support/.
