U.S. markets closed
  • S&P 500

    4,145.19
    -6.75 (-0.16%)
     
  • Dow 30

    32,803.47
    +76.65 (+0.23%)
     
  • Nasdaq

    12,657.55
    -63.03 (-0.50%)
     
  • Russell 2000

    1,921.82
    +15.37 (+0.81%)
     
  • Crude Oil

    88.53
    -0.01 (-0.01%)
     
  • Gold

    1,792.40
    -14.50 (-0.80%)
     
  • Silver

    19.86
    -0.26 (-1.30%)
     
  • EUR/USD

    1.0187
    -0.0063 (-0.61%)
     
  • 10-Yr Bond

    2.8400
    +0.1640 (+6.13%)
     
  • GBP/USD

    1.2071
    -0.0088 (-0.72%)
     
  • USD/JPY

    134.9700
    +1.9540 (+1.47%)
     
  • BTC-USD

    23,044.26
    -162.74 (-0.70%)
     
  • CMC Crypto 200

    533.20
    -2.02 (-0.38%)
     
  • FTSE 100

    7,439.74
    -8.32 (-0.11%)
     
  • Nikkei 225

    28,175.87
    +243.67 (+0.87%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Farmer on supply shortages: ‘We’re looking at a 25-50% increase in the cost of doing business’

In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Farmer and former Missouri Farm Bureau President Blake Hurst joins Yahoo Finance Live to discuss the impacts supply shortages on weedkillers and fertilizers are having on the farming industry, grain supplies during the Russia-Ukraine war, and the overall costs on farming.

Video Transcript

RACHELLE AKUFFO: Blake Hurst, Northwest Missouri farmer and Missouri Farm Bureau former president, joins us now. So in terms of on the ground, some of the things that you're dealing with right now, what are some of the pressures that are mounting on farmers at the moment?

BLAKE HURST: Well, as the article you quoted said, there have been shortages. We were able to get the chemicals we need, but we did some switching around, some difference in our formulations that we use. And of course, the prices are two to three times higher than what we were paying a year ago.

DAVE BRIGGS: Are you able to, Blake, put in context how much more the cost of business is in the last year than it was prior to the pandemic and the war in Ukraine, et cetera?

BLAKE HURST: Well, I would guess that about half of our inputs, fertilizer chemicals have been directly affected by price increases of 100% or better. So we're looking at a 25% to 50% increase in the cost of doing business. Commodity prices have been strong so that, obviously, helps pay those bills. But it has been a real shock.

SEANA SMITH: And Blake, you're also dealing with the climate factor as well. I know in your home state of Missouri, this has been an issue. Are you switching what crops you're planting? Are you not planting as much as a result of all of these factors that's hurting your business?

BLAKE HURST: No, prices are strong. So people are certainly planning all the crop acres they have available now. We've seen a shift, at least in planting intentions. We won't know till later on this month what the actual first report on actual planning will be. Planting intention showed a shift to soybeans, an increase of soybeans, a decrease in corn acres. Not coincidentally, corn takes much more fertilizer than soybeans. So people are responding to those increasing fertilizer prices.

RACHELLE AKUFFO: So as we look at some of these input costs that you mentioned from the seed to the end, in terms of fertilizer and everything else, we are seeing that the Department of Agriculture is really doing some scrutiny when it comes to some of these fertilizer companies to make sure that they're not price gouging farmers. In terms of the cost now versus perhaps at the beginning of the pandemic, are you seeing some sort of hope at the end of the tunnel?

BLAKE HURST: Well, the government seems to be working at cross-purposes, but because the USDA is looking into price gouging into the fertilizer market-- but at the same time, the Federal Trade Commission has found that some of the companies that import fertilizer in the US are dumping at a time when prices have tripled and have actually put tariffs on the importation of fertilizer. Much of our fertilizer is imported. So it seems like one hand, we're doing one thing. On the other hand, we're doing exactly the opposite. We need to remove those tariffs and get farmers the access to fertilizer from wherever it's produced.

DAVE BRIGGS: So a lot of factors impacting your business there. And now these chemical shortages hitting US farms. If you could talk about that, how that's impacting you as well.

BLAKE HURST: Well, as I said, we've had to change our crop mix over the Midwest a little bit. Part of that is access to inputs. We've also seen some folks-- when I talked to my chemical supplier a few days ago, he's recommending a little bit different formulations in order to make up for those chemicals that are certainly in short supply. And he's noted some of the most common commodity type chemicals that have several producers have been the ones that have been the shortest, which is sort of unusual.

RACHELLE AKUFFO: And as we see some of these costs get passed onto consumers, we see things like even the cost of eggs, inflation really hitting everything there. What are some of the discussions that you're having with farmers about having to pass some of these costs on?

BLAKE HURST: Well, obviously, we're price takers and don't make the price. And typically, when we have, like, a short crop like we did in 2012, and you see an increase in the farm gate prices for corn, wheat, and soybeans, the consumer may not notice because, in the process, food that she buys, so much of the cost is added after the farm. What we're seeing now is not only we are having increased farm prices, but of course, the price of transportation, processing, and marketing of that food is also facing high inflation. And that's why it's hitting the consumer's pocketbook quite so hard. So it is, I think, a really serious situation.

DAVE BRIGGS: Is this chasing farmers away from the industry altogether? And lastly, you mentioned the tariffs. What else would you like to see your elected officials do that could help?

BLAKE HURST: Well, we have to do what we can to decrease the cost of fuel. You're showing a picture of a combine on the screen. Our combine holds 250 gallons. Last year, when I filled it up, it might have cost me $500, $600. This year--