Fertilizer shortage hits Va. farmers
Russia's invasion of Ukraine rockets fertilizer prices
Lewis Everett farms cotton, peanuts and small grains in Southampton County, on the Virginia-North Carolina line. He expects to take a loss this year due to the rising costs of fertilizer and crop protectants, which include herbicides and fungicides.
Farmers have already negotiated some contract prices, he said. “A lot of those decisions were made in the first quarter, but you don’t know where the second and third quarter are going to end up as far as cost increase.”
Among the agricultural products in short supply because of the Russian invasion of Ukraine — like wheat, corn, barley and sunflower oil — is fertilizer. Russia and Belarus produce a large portion of the global supply, and the Fertilizer Institute, an industry group based in Arlington, says that Russia previously provided about 15% of all nitrogen imports in the U.S., which is responsible for 10.3% of global fertilizer consumption, according to a study released in March by researchers at the University of Illinois and Ohio State University.
The three main elements of fertilizer are nitrogen, phosphorus and potassium — also known as potash. Much of the world’s nitrogen fertilizer comes from Russia, and production of urea, one source of nitrogen fertilizer, requires natural gas, which is already at high prices.
The United States imports most of its potash from Canada, although an anticipated rail strike could disrupt supply, said Mark Alley, a Virginia Tech professor emeritus of crop and soil environmental sciences, and owner of consulting company AlleyArgonomics LLC.
The problem is that other countries who get their potash from Russia, Belarus or nearby countries now will have to look elsewhere, including to Canada, said Erika Marsillac, an associate professor of supply chain management at Old Dominion University. The U.S. will then face competition for fertilizer, driving prices up.
For American farmers, securing fertilizer somewhat depends on farm size, she added.
“We have a lot of large farming conglomerates. … Those large corporations, they have deeper pockets,” Marsillac said. “It’s going to cost more, but they sort of have the resources to be able to withstand price fluctuations. The small-to-midsize — perhaps a family farm — they are going to have a significant problem with it, because they might already be on a razor-thin profit margin.”
There are alternatives to traditional fertilizer, she said, but they can have lower yields and leave farmers with fewer crops.
Short supplies, short time
Lynwood Broaddus raises soybeans, corn, wheat, rye, barley and cover crops in Caroline County. He has traditionally used Class A sludge — treated sewage — to fertilize his crops but has faced supply issues and has not been able to get all that he needs. To make up for the remainder, he’ll have to use urea. He can’t buy it in advance because he doesn’t have the capability to properly store it so that it doesn’t volatilize in the sun. His dealers have said he will be able to get what he needs, he said, but he won’t know for sure until the time to spread it comes in a few months.
“Farmers do a whole lot of praying for rain,” he said. “I didn’t think we’d have to be praying for fertilizer.”
Last year, his farm paid about 40 cents to 50 cents per pint for liquid nitrogen, which he distributes before planting. This year, his supplier quoted him $1.10 per pint. Urea prices have also roughly doubled, but urea is more expensive to begin with.
Broaddus normally plants around 550 acres of corn, he said, but about 100 acres are in the air right now. He might plant soybeans on those acres instead, since they don’t require nitrogen fertilizer.
He and other farmers don’t have much time to decide. Broaddus said he will start spraying for corn in about three weeks, and once an area is sprayed with the chemicals needed for corn, soybeans can’t grow there.
Everett, meanwhile, will need to buy the remaining 40% to 50% of fertilizer he needs for his spring crops in the next 40 to 45 days. Prices have risen about 100% from what they were last spring, he said, and are continuing to rise. For some protectants, he’s facing about a 300% increase.
“You’ve got zero control over your cost side of things,” Everett said. “You do have control over your marketing, but we just don’t have any way of passing costs along back to the consumers.”
Grocery price increases don’t necessarily reflect growers’ prices, Everett said, but costs from farther along the production chain — fuel shortages are likely to drive prices up.
As grocery prices rise and news of a potential grain shortage spreads, consumers might begin to stockpile, Marsillac said, but people shouldn’t panic-buy. The U.S. normally makes enough grain for itself and has stockpiles, and the effects of grain shortages take a few years to show.
One piece of good news: On March 11, the U.S. Agriculture Department announced that it would award $250 million through a grant program this summer to support American fertilizer production.
In Virginia, the state Department of Agriculture and Consumer Services (VDACS) is working with fertilizer manufacturers and suppliers, a department spokesperson says. “Supplies are expected to be tight but sufficient to meet 2022 crop needs.”