FRANKLIN, Tenn. (WTVF) — Consumers are already seeing higher prices at the pump, but the war with Iran is also driving up fertilizer costs, a spike that could soon hit grocery bills.
The Middle East is a major producer of fertilizer.
At United Co-Op in Franklin, farmers are already feeling the pinch. The warehouse is stocked, and COO-Agronomy Division Keith Farmer told me they have been busy.
Since the war broke out, just over three weeks ago, the price of urea has jumped nearly 30%.
"The big one is urea; the nitrogen market is what really went wild. It was $590, and it's $800 today," Farmer said about the unit price.
By March, farmers have their plans set for the year, so a sudden spike like this can throw everything off track.
"There are some farmers who will cut back on their inputs, and there are others who will try to maximize yield, but either way, when it gets to the end, they are going to have a lot more in this crop than they anticipated," Farmer said.
If there is less food in the market, consumers will pay more at the supermarket. The co-op expects fruits and vegetables to go up first, with processed foods and meats following behind.
I asked Farmer if there is anything that could be done at the state or federal level to help cushion the blow. He said there is very little that can be done to have an immediate impact.
Over time, though, managing imports to bring in fertilizer from other regions could provide some relief.
Any price increases you see at the store are not about farmers getting rich. It is about covering costs and staying afloat.
"You're going to see a very reduced profit margin. This year, a lot ... everybody is shooting for zero. You know, if we can make a break-even year, this is going to be a great year," Farmer said.
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