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Tight margins common problem for most of the world’s farmers

The director of the University of Missouri’s Food and Agricultural Policy Institute says tight margins have U.S. farmers exploring all avenues of affordability.

In a recent International Food Policy Research Institute webinar, Seth Meyer says this year’s spiking fertilizer costs are reminiscent of 2022 when record input prices were caused by the war in Ukraine, however…

“We’re not in 2022 in terms of crop prices either.”  He says, “Affordability is much lower for high fertilization crops like wheat, like rice, like corn.”

He says higher commodity prices provided producers a cushion from feeling the full effects of the price hikes.

“Since 2023, we saw those margins narrow very quickly.”  He says, “Those margins continue to be pretty narrow. Farmers in the United States are concerned about margins. This isn’t just a United States issue. I think if you look around the world, you’d get the same impression from farmers in Brazil.”

Meyer says continued uncertainty in the global fertilizer market, coupled with more than adequate global grain stocks, likely means producers are stuck in a tight margin cycle for the foreseeable future.