Idaho farmers are confronting steep increases in fertilizer and diesel costs as international conflict disrupts global commodity markets during a crucial planting period.
Nitrogen fertilizer prices have climbed as much as 40 percent at the point of purchase for agricultural producers, according to Xiaoli Etienne, a professor of agricultural economics at the University of Idaho. The increase represents a significant burden for growers across the state, particularly in southern Idaho where farming operations depend heavily on fertilizer inputs.
“For southern Idaho, the number might be a little different, but I suspect it’s very similar magnitude,” Etienne told Twin Falls television station KMVT.
Fertilizer Costs Hit Operating Budgets
The price surge comes at a particularly difficult time for agricultural operations. Fertilizer purchases typically account for more than 30 percent of farmers’ operating costs, meaning the 30 to 40 percent price jump translates to substantial financial pressure.
“You think about your operating costs, over 30% is used to purchase fertilizer. And we see 30 to 40% increase in the fertilizer prices. And combined, that’s a very big impact on the farmers,” Etienne said in remarks reported by the station.
The supply disruptions stem from multiple sources. The ongoing war with Iran has closed the Strait of Hormuz, a critical shipping route for global commodities. Saudi Arabia alone supplies nearly 20 percent of the world’s phosphate trade, and the shipping bottleneck has constrained availability.
China Export Halt Compounds Supply Problems
China has added to the supply crunch by halting fertilizer exports to ensure adequate domestic supplies for its own planting season. The country stopped phosphate exports several months ago, according to Etienne.
While the United States does not directly import phosphate from China, the reduced global supply has pushed prices higher in American markets as buyers compete for available inventory from other sources.
Diesel fuel prices have also risen sharply, creating an immediate cost increase that farmers cannot easily mitigate. Unlike fertilizer, where growers can adjust application rates or switch to different crops, diesel has no substitute for farm equipment operation.
“For diesel, that’s a different story. This will probably have a more immediate impact for the producers,” Etienne said.
Limited Options for Cost Management
Farmers face difficult choices as they absorb the increased expenses. With diesel prices up a dollar or more per gallon, operations must reallocate budgets to cover the higher fuel costs while maintaining other necessary expenditures.
“They will need to reallocate, right? To make up this added cost, the higher expenses for the diesel. And I think, even a very small percentage change in prices, and let alone there’s a dollar or more than a dollar increase in diesel prices. This war, it’s a very tough situation for the farmers this year,” Etienne explained.
Approximately 80 percent of Idaho farmers had already secured their fertilizer supplies before the international conflict began, providing some insulation from the initial price shock. However, Etienne warned that even if hostilities cease soon, the impact will persist.
What Comes Next
The long lead times required for fertilizer production mean that supply disruptions will continue to affect markets even after a potential ceasefire. Production cycles lost during the conflict cannot be quickly recovered, and the global supply chain will require significant time to normalize.
“Even with a ceasefire, or even if the war stops, the production time for fertilizer has already been lost. And that’s a very long supply chain. The impact will show up, still show up. It’s not going to go away,” Etienne said.
Despite the challenges facing agricultural producers this season, the University of Idaho economist expressed confidence in the industry’s ability to adapt. “Farmers are resilient. We have seen over and over again farmers are able to overcome all those shocks they’re putting on them,” she said.
For Latah County wheat and lentil growers in the Palouse region, the fertilizer and diesel cost increases add to existing market pressures. The county’s agricultural economy depends heavily on spring planting success, and input cost management will be critical to maintaining profitability this year.