‘Worst-case scenario’: Fertilizer, fuel cost spikes hitting Nebraska farmers hard

LINCOLN, Neb. (KOLN) — The price of gas is up more than 30 cents from just a couple of weeks ago, and those prices are magnified for Nebraska farmers, who are paying, on average, $1 more for diesel than this time last year.

On top of that, fertilizer prices have gone up more than 30% since the end of February, when the war in Iran began.

The Middle East accounts for nearly half of all urea exports — the most widely used solid nitrogen fertilizer worldwide. And around half of that nitrogen is applied to corn in the spring.

It’s got farmers concerned not just about their bottom line, but about the food supply chain.

Bart Jacobson with Growth Technologies said that every day the war goes on puts fertilizer plants further and further behind.

“If you really looked at things, you’d almost say this is the worst of the worst case scenario of what could happen in the nitrogen business,” Jacobson told 10/11 on Tuesday.

Henderson-area farmer Jason Lewis said the spiking cost of diesel and unknowns on fertilizer are crunching Nebraska farmers right as they’re preparing to plant.

Lewis said fertilizer prices in his area jumped from around $800 a ton to $1,000, if not more.

Now, he said, there are places where you can call for fertilizer, but they can’t give you a price.

“There’s some places where it’s pulled. So you can pull fertilizer, but you won’t know the cost until they figure it out,” Lewis said. “So that’s kind of scary.”

On the plus side, Jane Liu, an economics professor at the University of Nebraska at Omaha, said the U.S. is more energy independent than it was in the 1970s, when Middle East conflict spurred massive inflation at home.

“It still depends on the intensity and the duration of the conflict,” Liu said. “So if the conflict is persistent, if it lasts for a long time, then it will definitely have a bigger, more profound impact on people’s lives.”

The impact, she said, is still not trivial.

“It’s not restricting our profits, it’s increasing our losses,” Mark McHargue, president of the Nebraska Farm Bureau, said.

Some farmers will pivot away from nutrient-hungry corn to something like soybeans, but many will simply see how much less they could use.

“We are going to really slim that down to the very minimum. And most people have already had that in their recs,” McHargue said. “So I just don’t know how we’re going to reduce that even more.”

What’s good for Nebraska farmers, Lewis said, is also a win for the state.

“How the ag economy goes is how the state economy is going to go,” he said.

Lewis added the expansion of E15 could help lower gas prices significantly.

Regardless, prices for many things will remain uncertain as long as the war in the Middle East continues.