Agriculture is Virginia’s biggest private industry. The war in Iran has caused a significant uptick in fuel and fertilizer prices, which is impacting farmers who rely on them, as well as everyday consumers. WMRA’s Ayse Pirge reports.
Fuel and fertilizer prices have been impacted by disruptions in the Strait of Hormuz, which is one of the most significant maritime checkpoints in the world. According to a report by the United Nations’ Trade and Development, one third of global maritime fertilizer shipments pass through the strait, as well as around a quarter of the world’s seaborne oil.
In 2024, the U.S. imported around 7% of its crude oil and condensate from the Gulf countries, which passed through the Strait of Hormuz. As for fertilizers, the U.S. imported around 10% of urea through the strait in 2023, with a slightly higher percentage for phosphate fertilizers. There is a very high rate of domestic production for ammonia, while potash imports are not reliant on transit through the strait.
DOUG PAUGH: The increase in fertilizer and fuel costs will impact everybody eventually. I mean, fertilizer is put down for virtually every crop that’s out there. What we do is mostly organic, but we do use fertilizer in some applications in some areas.
Doug Paugh is the owner of Paugh’s Farm in Quicksburg. They offer–
PAUGH: Beef, chicken, eggs. We have peaches, blackberries, rhubarbs, strawberries, elderberries. We have a little bit of everything here.
Paugh says that almost all of the farm’s tractors use diesel.
PAUGH: When it comes to fuel costs, every time you start up your tractor, that’s going to be more expenses, So, especially for cattle, the hay that you have to buy in or… make is going to be far more expensive than it was last year just because the fuel prices alone.
The average price for diesel, as of June 4, is around $5.25 in Virginia, which is slightly lower than the national average. For Virginia, this is a more than 50 % increase from last year’s average diesel price. Paugh says that when fuel prices increase, then everything becomes more expensive.
PAUGH: You know, we don’t make the feed for our chickens. We buy it at the feed mill. But of course that feed goes up, because the farmers who do harvest the crops that’s turned into that feed are using more for diesel. So, they’ll be charged more for it, and we’ll be charged more for it. And then, of course, we’ll have to pass it on or else we’ll go out of business.
Jessica Hall, the co-owner of Harmony Harvest Farm in Weyers Cave, says that they had to absorb the additional cost of fertilizer.
JESSICA HALL: I actually just had to go purchase fertilizer yesterday. And it had doubled since I had last purchased it, which makes it really difficult since we have already set our sale prices for our products for the year. So, we just have to absorb that additional input cost.
Harmony Harvest is a cut flower farm, and Hall says they are seeing fewer online orders from their retail customers.
HALL: We ship flowers nationwide. And so, shipping costs for us to ship out our bouquets have increased exponentially. So, we are seeing fewer orders go out the door for our retail customers.
And then on our local deliveries, we have an increase in costs that we have not yet passed onto our customers for our local delivery routes.
But, she says there are also new opportunities in the current trade landscape.
HALL: In our industry, because so many flowers are imported into America and rely on air freight cargo to come into the U.S., and they’re now also affected by heavy tariffs, the cost to get them here is exponentially higher than my produce cost now even with the increased cost of fertilizer and fuel cost.
Hall says that, even with an added fuel surcharge, her flowers are priced more competitively for local florists. They also anticipate seeing an uptick in visits to the farm, which Hall believes is because people are choosing to forgo lengthy travel.
HALL: And that’s been another revenue funnel that we’ve been leaning into to kind of adapt for the increased fuel pressures that we’re all feeling.
Shourish Chakravarty is an assistant professor with the Southern Piedmont Agricultural Research and Extension Center, which is a part of Virginia Tech. He points to several factors affecting farmers right now.
CHAKRAVARTY: I would say farmers are not used to such sudden price increases. And secondly, their interest rates are high. Third is this volatile environment, like thinking about the future.
He says they've also suffered from droughts in recent years. And in the current planting season, he says farmers–
SHOURISH CHAKRAVARTY: …may not be affected as much as we are thinking by the fuel price increases or the fertilizer price increases, because they have already paid for those costs. The problem is what will happen next, especially the next year’s growing season or the season that’s coming after this.
He points to data showing that the percentage of farmers who have pre-booked fertilizer purchases in advance of planting season is 19% percent in the South, which includes Virginia. But Chakravarty believes that if the situation normalizes, prices for fuel and fertilizer will decrease.
CHAKRAVARTY: If we look at the historical data, for example, the Russian invasion that happened in 2022… the increase was very steep in fertilizer prices. But eventually, it came down.
However, Chakravarty does point out that back then, the interest rates weren’t as high as they are now.
CHAKRAVARTY: With trade, the world is more connected. So, there are always ripple effects that are felt… across the world… So, a decrease in production here or a decrease in production in another country might… translate to different impacts by country.
The ripple effects of war are felt globally, with economic, agricultural, and human costs.
