TRAVERSE CITY — Michigan farmers are being faced with growing supply chain challenges caused by conflict in the Middle East.
Farmers say they’re already seeing higher input costs about 10 days after conflict in the middle east sent global supply chains spiraling.
“It’s just a tight squeeze on agriculture right now,” said Jim Bardenhagen, owner of Bardenhagen Farms in Suttons Bay. “So we’re anxious to try to figure out some ways to move forward and make it work. People need us to produce food so they can eat.”
According to the national Fertilizer Institute, a significant portion of products needed to make fertilizer travel through the Strait of Hormuz between the Persian Gulf and Gulf of Oman.
Farmers and national experts say they’re mainly worried about the cost of fertilizer, an essential input that has been impacted by trade disruptions.
“The major combat operations in Iran and escalating military tensions in the Middle East have immediately created additional volatility in the global fertilizer market,” said Veronica Nigh, chief economist for the Fertilizer Institute.
The Institute says that almost half of the world’s urea travels through the strait, and that the input material has seen a 30% price increase over the first week of the war.
Bardenhagen says the developments are adding even further pressures to farmers around the state.
“Our input costs are going up, but we can’t necessarily get more out of our products at the other end,” he said.
Nigh says the overall impact of the conflict will depend on how long the shipping disruptions are maintained.
“The market is certainly behaving like there’s still a lot of unknowns out there,” she said.
Nigh also says the last two weeks have significantly disrupted global fertilizer trade, and investors are planning on more potential disruptions.
“It’s a pretty time-sensitive endeavor that we’ve that we’ve got here,” she said. “Otherwise, we could be looking at fairly significant production declines across fairly large swaths of the U.S. and other parts of the world as well.”