Ohio Farmers Caught Between Rising Costs and Stagnant Prices

Ohio's farmers are facing a perfect storm of rising costs and stagnant prices. Tariffs on Canadian potash, used by American farmers at a rate of 90%, have pushed its price to $350-$360 per ton worldwide, up 21% from 2024. This increase is compounded by strong global demand, driving up the cost of fertilizers, crop chemicals, machinery, and equipment repairs.

War in the Middle East has further exacerbated the situation. Iran's closure of the Strait of Hormuz led to a doubling of urea prices from $400 per metric ton to over $850 in April, before easing slightly to around $453 in June. The same shock sent crude oil above $110 a barrel and diesel fuel to record highs.

Despite these rising costs, Ohio farmers are not seeing corresponding increases in the prices they receive for their crops at the grain elevator. In fact, grocery prices have risen 25% since 2020, while food-at-home inflation remains high. However, most of this extra money accrues to processing, branding, logistics, and retail owners, rather than the farmers themselves.

The concentration of the agribusiness industry is a major contributor to this disconnect. Bayer and Corteva Agriscience control around 72% of planted corn acres and 66% of soybean acres in the US, while four meatpackers handle over 85% of steer and heifer purchases. This concentrated system keeps the spread between what consumers pay and what farmers receive widening.