Iran war could raise global fertiliser costs: US farm leaders

Washington, March 11 (IANS) American farm leaders on Tuesday warned US lawmakers that the conflict involving Iran could push up global fertiliser and fuel prices, adding fresh pressure on farmers already struggling with rising costs and volatile markets.

The warning came during a Senate Agriculture Committee hearing on expanding domestic demand for US-grown agricultural products as farmers grapple with financial stress and uncertain global conditions.

Zippy Duvall, president of the American Farm Bureau Federation, told senators that geopolitical tensions are likely to worsen the farm economy. “The conflict in Iran is expected to make the cost of fuel and fertilizer soar even further,” he said in testimony before the committee.

Farm leaders said the agriculture sector is already under severe pressure from falling commodity prices and high production costs. Matt Perdue, president of the North Dakota Farmers Union, said farmers are confronting a combination of economic and geopolitical challenges.

“Family farmers are facing significant economic headwinds, our input costs are high, commodity prices are low, and our markets are extremely volatile,” he said.

He added that global tensions are worsening the situation. “Trade disputes and now the war in Iran have compounded these economic challenges,” Perdue told lawmakers.

Perdue said geopolitical tensions are affecting both sides of the farm economy.

“Geopolitical tensions have created pressure on both sides of the farm income equation, driving up input costs and depressing commodity prices,” he said.

The Senate hearing highlighted growing concern among farmers about rising fertiliser costs, which account for a major share of crop production expenses for crops such as wheat, corn, and soybeans.

Lawmakers said disruptions in global supply routes could intensify the problem.

Senator Tina Smith noted that tensions in the Strait of Hormuz could further increase fertiliser costs.

“You know now we have additional geopolitical tensions… the Strait of Hormuz and some of the challenges there driving another increase in already high fertilizer costs,” she said.

Smith warned that the cost increase could make farming operations financially unsustainable.

“That fertilizer costs on an acre of wheat is about 40 per cent of your production cost, and that’s going up 30 per cent now,” she said.

Farm leaders also said farmers are already struggling to remain profitable.

Chairman John Boozman said the US farm economy is under severe stress. “If you’re putting something in the ground, you’re probably losing money,” Boozman said, noting that no row crop is currently profitable in his home state of Arkansas.

He added that the past three years have been particularly difficult for farmers across the country. “The last three years have been absolutely punishing,” Boozman said.

Witnesses said rising costs, trade disruptions, and global competition have combined to weaken farm incomes.

Perdue warned that farmers are carrying historically high debt burdens. “Farmers and ranchers are also shouldering record-high debt loads higher than the 1980s,” he said.

Duvall said the agriculture sector must strengthen domestic markets to reduce its vulnerability to geopolitical shocks and trade disruptions. “Today, we must strengthen domestic demand for American agricultural products,” he said.

Farm groups told lawmakers that while government support programmes have helped farmers survive recent crises, long-term solutions must focus on expanding markets and stabilising costs.

–IANS

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