The soaring prices of fertilizers and fuels amid soaring inflation are putting heavy pressure on US farmers.
The US Department of Labor on April 12 released a report showing that the consumer price index (CPI) increased by 8.5% in the year to the end of March. America’s highest inflation rate since December 1981.
According to the American Automobile Association (AAA), the average price of gasoline has increased by more than 2 USD/gallon (1 gallon = 3.78 liters) compared to the same period in 2021. Fertilizer prices have also increased by 42% since the conflict between Russia – Ukraine broke out, forcing American farmers to find ways to cut costs.
Craig Robertson, Steve Dombrowski and Nick Vowles are all farmers in the state of Illinois, the region with the fifth largest gross domestic product (GDP) in the US. When they first took over the family farming business, they considered it the “American dream”, but now they have become a huge burden.
“People just see food prices go up and think farmers are doing well,” said Robertson, who grows soybeans, wheat and corn. “But that’s not true at all. I’ve never seen a situation as bad as it is now.”
Tom Tiffany, a Wisconsin congressman who grew up on a farm, said record inflation was taking a toll on the economy, with farmers being one of the worst-hit groups.
Farmers work on a farm in Pecatonica, Illinois, USA, July 25, 2018. Image: Reuters.
“Rising energy prices hit farmers hard from every angle, from diesel to fertilizer, which is very important in production,” said Mr. Tiffany. “This could affect America’s ability to feed the world.”
According to Macro Trends, corn prices have increased by 11% and wheat by 13% since the outbreak of the Russia-Ukraine conflict, along with a surge in demand for wheat due to crippling supplies from Russia and Ukraine. However, it is difficult for American farmers to increase production to make up for this shortfall.
“It’s very hard for us to save fuel by changing farming techniques,” said Dombroski, an Illinois farmer. “How far will Americans struggle to get enough money to buy essentials? It’s going to be extremely difficult for us.”
Vowles, who co-farms with Dombroski, said farming and raising livestock was once an attractive occupation in the US, but their business is dying due to rising inflation and the joy of farming is now dwindling. .
“In the past, we spent 12-16 hours working with tractors in the field and really loved what we did,” Mr. Vowles said. “Now there are worries about how to reduce the cost per corn harvest.”
Rachel Schroeder, who owns a small dairy farm in Jefferson County, Wisconsin, USA, says the past five years have been particularly stressful.
“Our profit margins have always been tight,” says Schroeder. “Every year, we always sit down to see if we have to shut down our dairy operations.”
Although Schroeder’s farm is profitable in 2021 despite the pandemic, she attributes this profit to generous government subsidies. She says such subsidies are partly to blame for the inflation.
Tony Kurtz, a Wisconsin congressman, said rising costs are destroying the financial viability of small-scale farms. Diesel price in 2021 is $2.49/gallon, much higher than $1.68/gallon in 2019. By this year, the situation is getting worse.
“Recently, I was paying $4.05 a gallon for diesel. Such a high price would affect every farmer across the state,” Kurtz said.
Farmers at a farm in Pecatonica, Illinois, USA, July 25, 2018. Image: Reuters.
Farmers across the United States are preparing for the 2022 crop. Ms. Schroeder decided to fertilize her farm last fall, fearing a fertilizer shortage. “We’re doing this to make sure there’s something in the soil when it’s this year’s growing season, because we can’t be sure of the supply,” Schroeder said.
Kurtz also said he buys potash fertilizer for 773 USD/ton in 2021. “When I asked to buy today, I was shocked to learn that the price of potash fertilizer has increased to 1,425 USD/ton,” he said. “Due to the Russia-Ukraine conflict, we should produce as many agricultural products as possible, but we are powerless due to high inflation.”
Joe Bragger, a dairy farmer in Buffalo County, Wisconsin, says that despite higher commodity and dairy prices, he believes this is not sustainable.
“It’s true that the price of milk is going up, but the cost of transporting milk to town has also increased to $60,000 a year, compared to $4,500 before,” Bragger said.
According to him, American farmers are also victims of inflation and should not be blamed when food prices rise. “We are also struggling to make a living every day like everyone else,” Bragger said.
Duc Trung (According to Wisfarmer/NewsNation)
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