Fertilizer prices finally drop with no impact on farmer's market prices
Fertilizer prices dip for the first time since November 2020, but the drop comes a little too late to impact prices.
Amid a slew of bad economic news last week, including another jump in the Consumer Price Index, it looked like farmers were getting a bit of a break on the high cost of fertilizer. Prices dropped for the first time in almost 19-months, from supper high to just really high.
The cost of fertilizer has gone up so much, the Michigan Farm
Bureau estimates that the average 2,500 corn and soybean farmer is paying $175,000 more for fertilizer this year than last year.
Though prices have been rising for several years, the past year has been particularly bad. The market’s been driven up by high tariffs on Moroccan fertilizer products and by the war in Ukraine. The conflict has cut off the flow of agricultural and fertilizer exports from one of the world’s major exporters – Russia.
DTN/Progressive Farmer tracks fertilizer prices from its headquarters in Omaha, Nebraska. At the end of May, prices had dropped by as much as 30% in some places.
Loren Koeman is the lead economist and manager of the industry conservation regulatory relations department at Michigan Farm Bureau. He said the price drop is welcome news, but prices were already over inflated, and the drop wasn’t unexpected. That’s because Michigan farmers have already applied most of the fertilizer for the year, and when there’s less of a demand, the price goes down.
“I would try to compare it to like saying you know natural gas prices have come down so great news for people who heat their houses with natural gas. Well, we’re not heating a lot of houses right now, right? So, it hopefully forebodes good things for next year, but it’s probably a little too early to tell,” Koeman said.
Koeman said farmers shouldn’t order fertilizer for next year just yet.
“The turn of world events and many other things will impact what fertilizer prices will be and I certainly don’t have a crystal ball, but hopefully we’ll continue to see more moderation.”
Susan De Leo is the owner of De Leo Farms, a 40-acre farm in Bangor. She’s been selling her produce at the Kalamazoo Farmer’s Market for decades.
“I started here with my parents when I was a kid. So totally, I've been here like 65 years,” said De Leo.
From fuel to farm help to finding twine to tie up her tomatoes, De Leo said prices have gone up and some supplies are scarce.
“It’s not just the fertilizer, of course, but that's a big part of it. We're going to have to charge more for all of our produce.”
One dollar more for asparagus, and up to $2 more for strawberries this season. After 65-years growing and selling produce, De Leo says she’s never seen anything like it.
“It's just all these things coming together are so different
from other years. I mean, there might have been one, one of
those components’ other years, but not that many all at once,” De Leo said. “This is just, you know, unprecedented because you can’t get some things and everything's up.”
Another problem is finding labor, and not just for the fields.
“It's just harder to find even people that want to work here and help us at the market. Because who wants to give up their Saturday morning? we you know, we need them at like six o'clock in the morning. That's rare to find somebody that's willing to do that” she said.
Despite higher prices, De Leo says customers are supportive.
“It's still wonderful and I feel like it's a gift, you know, to be able to do that and supply food to people. And when you see all the families, we have so many families that come with young kids and, you know, it's so important for them to see that there's people that grow this and that they're trying to make your life better and feed you with healthy food.”