Rising prices for farming inputs could lead to further prices increases across the country and food insecurity around the world.
Rising prices for farming inputs could lead to further prices increases across the country and food insecurity around the world.
People laughed at stories of people hoarding toilet paper at the start of the COVID-19 pandemic. However, no one is laughing two years later as breaks in the supply chain have hiked up prices and left shelves bare in stores across the country.
Dennis Carnahan, owner of Carnahan and Sons Farms says that his family is often shocked by high prices and bare shelves at the grocery store.
“My wife comes home from the grocery store and says ‘woah’ you won’t believe.” Carnahan said last week. “And sometimes the shelves are bare, it feels like we’re not living in America right now.”
In fact, the average American household is now spending almost $320 more a month than they were in March of 2021 according to data from the most recent Consumer Price Index report.
These supply chain issues have touched virtually every industry, and farming has been no exception. Farmers are reporting difficulties in getting the pesticides and fertilizers, among other inputs, they need to plant their crops this year.
Dennis Carnahan and his son John Carnahan talk about the stress on chemical supply companies since the start of the COVID-19 pandemic and their own difficulties in securing necessary inputs like fertilizers.
Another barrier to farmers has been the quick rise in prices of these farming inputs.
The general inflation rate from last February has been 6.5% while for agriculture inputs that same inflation rate has been more than double at 15.5%.
With this inflation, farmers like the Carnahans are reporting paying more than two times their usual rate for pesticides—and that’s if they are able to get the inputs they need at all. The Carnahans are waiting for crucial shipments of herbicides that they rely on for strong harvests in the fall. Without the herbicides, John Carnahan says “you can have spots in the field where it can completely choke the crop out.”
The Carnahan family farm has not experienced difficulty getting the fertilizers they need this year for their corn planting because they order a year in advance, but Dennis says he is worried about the troubles he might face next year.
However, other farmers did not plan ahead as much as the Carnahans. These farmers are adjusting the crops that they plan to grow in the year ahead to work with the supplies they have.
Due to the inflated cost and shortages of fertilizers, farmers are choosing to plant less corn, which is a highly nitrogen-intensive crop according to Carnahan.
The 2022 Prospective Planting Report says that farmers across the US reported an intent to plant 4 million acres less corn than in 2021.
Dr. Michael Langemeier, a professor of Agricultural Economics at Purdue University, says that he hopes that farmers will take notice of rising corn prices and choose to plant more corn than the report currently signals.
According to Langemeier, there are several reasons for the shortages and steep price increases. However, a main reason is that Russia is one of the primary producers of the key ingredient anhydrous ammonia which is used in the most kinds of fertilizer.
Other Eastern European states like Belarus are also responsible for manufacturing important agricultural inputs. The Russian invasion of Ukraine has interrupted trade of chemicals like the anhydrous ammonia.
However, the impact of these disruptions to the supply chain could go much further than extra money spent at the grocery store on food Langemeier says.
“There’s gonna be some places in the world food insecurity is going to be a bigger issue because they rely on wheat particularly, from other countries.” Langemeier said. “Particularly in some of the poorer countries in the world that rely on, rely on wheat imports.”
With the breadbasket of Europe, Ukraine, expecting much lower yields this year as a result of the war with Russia, many of the countries that rely on grain exports from them will need to find alternative sources or increase their own production.
Langemeier discusses how the Russo-Ukrainian conflict will impact prices and availability of corn and wheat on the global market.
But, as American farmers face barriers to crucial inputs, the global export market could potentially see lower yields from the US as well this year.
Without the US supply of grain as a fallback, the host of Middle Eastern and Central Eurasian countries with low ability to produce their own food supply could be facing, as Carnahan says, “a potentially catastrophic” situation in the fall.