Michigan's supply of nitrogen and phosphorus-based fertilizers has taken a hit from shipping disruptions caused by the U.S. war with Iran.
Bill Knudson, an agricultural economist at Michigan State University, said about 20% to 30% percent of the world’s fertilizer exports pass through the Strait of Hormuz, which Iran has shut down.
For some Michigan farmers, this is a tough reality. The state's two most valuable crops, corn and soybeans, grow best with nutrients from fertilizers often shipped through the now-closed Strait.
“Corn is very, very dependent on nitrogen,” Knudson said. “Corn uses a lot of nitrogen to grow so corn farmers are facing a really difficult year this year.”
Urea fertilizer, which delivers nitrogen, has increased from $580 per ton on February 27 to $775 per ton as of May 28, according to Michigan Agricultural Commodities — a 33.6% percent price hike in three months.
Fertilizer prices were already trending higher before the war with Iran due to other conflicts like the war in Ukraine and China’s export restrictions, said Knudson.
“This is something that’s been going on for two or three years, but this year the war has made it worse and kind of sped things along,” he said.
Diammonium phosphate, a fertilizer containing phosphorus which is necessary for soybean production, had also risen modestly in cost, according to Knudson’s recent report.
Farmers in the Midwest pre-booked their fertilizers, buying their fertilizer ahead of the war beginning, at a much higher percentage than farmers in other regions of the United States. However, 1 in 3 of those farmers still reported they did not have the fertilizers they needed for the season, according to the American Farm Bureau Federation.
Along with increased fertilizer prices this season, Michigan has also experienced more precipitation compared to years prior. With historic flooding in Northern Michigan, many farms were waterlogged right as soybean and corn planting season began.
Flooding and increased rainfall also affects the macronutrient levels of nitrogen and phosphorus in soil. A study by the University of Illinois found excessive rainfall has effects on corn comparable to drought. It can reduce corn yields especially in colder states, like Michigan, where evaporation is slower.
One part of this loss in corn is the leaching, or denitrification, that occurs during heavy rainfall, where plants can no longer use the nitrogen, according to the study.
Phosphorus also decreases in soil after heavy rainfall which causes other environmental issues.
Ehsan Ghane, associate professor and extension specialist at Michigan State University, said phosphorus runoff contributes to algal blooms in the Great Lakes.
“Whenever there’s heavy rainfall or a continuous rainfall that has added a lot of water into the ground, some of the phosphorus that’s in the soil is going to get released,” Ghane said. “When the concentration of phosphorus is high and you add warmer temperatures to it, the algae start growing rapidly.”
Ghane said he doesn’t believe soybean and corn yields can be successful without nitrogen and phosphorus fertilizers but that through water management and soil management techniques, farmers can reduce the amount of phosphorus they lose.
Ghane said typically after excessive rainfall farmers do not reapply fertilizers but if there is more rain, more phosphorus will leave the soil if it is not managed. He said with the current amount of rainfall Michigan experiences, only a fraction of the phosphorus leaves the soil but even that amount is enough to cause algal blooms.
With higher fertilizer prices, greater rainfall, and a loss of nutrients, this year has been difficult for farmers. On top of raising fertilizer prices, diesel prices have also skyrocketed.
“Diesel prices are way up and farmers are big users of diesel,” Ghane said. “That’s also a major consideration and a major source of stress on farm profits.”
Knudson said the price increases this year may be a breaking point for some farmers who were barely hanging on.
“Some farmers will probably go out of business this year,” he said.
