Agriculture Woes: Bad Guys or Bad Timing?
When I was younger, I used to read comic books. They were colorful and fun, especially superhero titles such as Superman and Fantastic Four.
From a story standpoint, their plots tended to be simple. Some crisis would arise — such as a heat wave in the middle of winter or insects suddenly attacking crops. Eventually, the hero would figure out that all this disruption was the work of some bad guy. He/she would then battle the villain and save the day.
The reason I bring this up is I see parallels between these comic book plots and today’s agricultural world. The past few years, it seems as if anyone upset about rising ag prices is looking for a bad guy behind it. More likely, this could just be bad timing.
For evidence of this trend, consider two sectors of the ag economy — equipment and fertilizer. Over the past few years, both of these segments have witnessed rapid rises in prices for customers. In fact, according to multiple sources, the average price for ag equipment has increased more than 25% since 2024. Meanwhile, fertilizer prices have risen between 25% to 40% over this same time span.
As the overall farm economy has remained flat during this period, there have been many accusations by growers and their trade associations that some kind of bad guy is behind all of this.
“Farmers are dealing with razor-thin margins, and if someone or something is manipulating the price of an essential tool like fertilizer, then we deserve to know more about what is going on,” said Eric Tipton, President of the Ohio Corn and Wheat Growers Association, in a press release.
The government has since heeded this call. In March, the Department of Justice announced a formal investigation into fertilizer suppliers’ pricing. It’s been suggested that a similar evaluation of equipment manufacturers’ prices might be next.
But could this all be just bad timing? Let’s consider some of the other reasons why equipment and fertilizer prices might have stayed high these past few years.
For equipment, the major manufacturers have all spent the past few years investing heavily in high-tech product development. Artificial intelligence-driven systems are now becoming standard features on many self-propelled sprayers and fertilizer spreaders. Naturally, all this tech that costs millions of dollars to develop will add to the overall per unit cost.
Higher fertilizer prices could be even easier to explain. The laws of supply and demand dictate this market. Coming out of the COVID disruptions of 2020-21, fertilizer demand globally increased, causing prices to spike.
Since then, there have been other factors at work keeping fertilizer prices high. This has included China limiting phosphate exports to other countries and, most recently, the Iranian conflict. This has severely limited the flow of fertilizer from source countries through the Strait of Hormuz. These and other factors have kept fertilizer supplies tighter than normal, which has caused prices to remain high.
It’s perfectly normal for anyone who doesn’t feel like they are in control of the world around them to look for a bad guy to blame. But ultimately, it might instead all boil down to a case of bad timing, caused by a set of extraordinary circumstances.
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