U.S farmers feel the pinch as the war in Iran drags on

[0:00] Welcome back everyone. The war between the U.S. and Iran has sent the cost of some goods soaring [0:05] and caught in the crosshairs are none other than U.S. farmers. From the fertilizer to plant their [0:10] crops to the diesel that runs their tractors, farmers are feeling pinched from all sides. [0:15] ABC's Elizabeth Schulze was in Virginia where there's real concern about the long-term damage [0:20] this war can inflict. It's peak planting season at Koulon Farm in Bealton, Virginia. [0:29] Fourth-generation farmer Ben Smith and his father Ken are now applying fertilizer for their crops [0:35] including soybeans and corn. You can under spray but you can't over spray. Farmers prepare for all [0:42] sorts of contingencies but not necessarily war. We didn't see this one coming. We weren't prepared. [0:53] The crops they're getting ready to plant will be used to feed their herd of dairy cows. [0:58] How much milk comes out of this farm every day? 10,000 gallons leave this farm a day. [1:03] 10,000 gallons of milk every single day. [1:07] We watched as a fuel truck filled up the farm's diesel tank. It happens three times a week here [1:12] during planting season. With his trucks and tractors all running on diesel, Ben says they're going [1:17] through about 3,000 gallons a week. We were paying roughly $3.50. Now we're at about $5.50. So it's [1:25] increased two bucks a gallon. Two bucks just in six weeks. That's about right. [1:31] It's a pretty big increase in a short amount of time. [1:33] A pretty steep increase in a very short amount of time. They left me scrambling trying to find some [1:37] additional storage tanks so that I could try to buy up as much as I could now before it continues to [1:44] track up. According to Gas Buddy, diesel prices are up nearly 50 percent since the start of the Iran [1:51] War. Ben says he's paying an extra $80,000 in fuel this spring compared to last year, plus 35,000 more [1:58] in fertilizer. So you're talking more than 100,000 in extra costs because of what we're seeing with [2:04] the supply chain in the war. That's right. About one-fifth of the world's oil and one-third of global [2:10] fertilizer supplies typically flow through the Strait of Hormuz. And with the Strait effectively [2:15] closed since the start of the Iran War more than six weeks ago, farmers across the U.S. are grappling [2:21] with an historic supply shock that's sending costs soaring here at home. Why are they seeing higher [2:27] prices for fertilizer when this fertilizer isn't even necessarily coming from through the Strait of [2:33] Hormuz or other countries in the Middle East? So a lot of it is just such a global market that no [2:38] matter where it's coming from, it's affected. Britton Green is the director of agronomy at a [2:44] co-op that supplies fertilizer to Ben's Farm and others in the Virginia area. So these two cars here [2:50] are potash. They come out of Canada. Canada. And the two we're looking at here are urea and that [2:58] originally came from Russia. He shows us what urea, a nitrogen-based fertilizer, looks like up close. [3:05] Kind of looks like snow. It does. Like little pellets. Yep. About $90,000. Each rail car is $90,000 [3:12] worth of product. Yes. And what would it have been? About $50,000. So each load, the price of a load [3:20] went from $50,000 to $90,000. President Trump is taking note in a post writing, [3:26] I'm watching fertilizer prices closely during our fight for freedom in Iran. The United States will [3:31] not accept price gouging from the fertilizer monopoly. American farmers, we have your back. [3:37] Are you following like the president's posts about what's happening? Like are you? Yeah, [3:41] we're watching that closely because whatever's posted can have a really big effect. For many [3:47] American farmers, the surging costs of fertilizer and diesel are just the latest challenge for [3:52] their bottom line. Last fall, the trade war left many farmers scrambling after China refused to buy [3:58] U.S. soybeans. The White House stepped in with a $12 billion bailout. Now Agriculture Secretary [4:04] Brooke Rollins isn't ruling out more help from taxpayers. Everything is on the table. This president [4:10] is convicted. He is resolute. He will stand with our farmers. He knows that his national security [4:17] issue. Do you blame the president's policies for what's happening here? No, I don't, you know, [4:23] I don't know who's to blame. I think it's just part of life and part of business. Ben Smith says [4:27] farmers in his community are getting creative, turning to whatever cheaper fertilizer alternatives [4:32] they can find, like manure, which is rich in nitrogen. For the first time that I can remember, [4:37] we're actually exporting manure to a neighboring grain farmer. You had a farmer come to you to say, [4:43] we'll take this manure off your hands because fertilizer costs are so expensive. This is an [4:47] alternative. That's right. A lot of consumers are looking at these rising diesel or other input [4:52] costs and saying, well, does that mean soon I'm going to be paying more at the grocery store? [4:58] I think that's going to affect all of us. Even, you know, even my wife and I, we, we go to the grocery [5:02] store and get our groceries just as well as anybody else. I think it's inevitable that that's [5:06] unfortunately going to trickle down to the, to the consumer. But for many farmers like Ben, [5:11] price hikes in the grocery store don't always translate into bigger profits. There's been [5:16] times in the past that milk has gone up in the grocery store and it's actually trended down here [5:20] on the producer side. So just because consumers are paying more for groceries doesn't mean you're [5:25] making more money. That's exactly right. In fact, we're usually not. This fourth generation farmer [5:31] is confident he can stay afloat. We're going out the other way, aren't we? Well, we're going out this way. [5:35] All right, fine. Long enough to keep the farm running for the next generation. Legacy is important to me. [5:41] I love what I do. I think there is no greater career choice for me than dairy farming, but there is some [5:48] pressure associated with, uh, with performing and keeping it going and being able to hand it off to the next generation [5:55] in a better condition than when I got it.