• The blockade of the Strait of Hormuz has increased the cost of diesel fuel and fertilizer used by Michigan farmers
• The price farmers are able to sell after harvest — particularly corn — has not risen like costs
• Farm economists are concerned the economic pinch could drive some farms out of business

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MONROE — On a windy April morning, John Delmotte’s eyes focus on a conveyer belt loading corn into an open-top semi-trailer while his mind does math.

When full, the trailer will hold 1,000 bushels of corn from Delmotte’s harvest last fall. At the grain elevator in Toledo, he can get about $4.50 per bushel. With the amount he spent on fertilizer, diesel and seeds last year, he’ll eke out a $250 profit on this load.

But as chaff from the shelled corn blows across the Monroe County farm lot, Delmotte runs another calculation in his head. Diesel prices have jumped more than 50% since last summer, and fertilizer prices have also increased dramatically. The large white tanks normally filled with 90,000 gallons of fertilizer before planting season in early May are only 20% full. 

Delmotte held off buying fertilizer in the fall because of high prices. Now, they’re higher.

Because of those higher costs, if he gets the same $4.50 a bushel for corn after this year’s harvest, he’ll at best break even for the year.

“It’s not the $4.50 corn that’s the problem,” said Delmotte, current president of the Michigan Corn Growers Association. “It’s the cost of the inputs.”

As Michigan farmers prepare for planting season, higher prices for fertilizer and diesel — both sparked by the war with Iran — are making a stressful planting season for Michigan farmers, some of whom are already barely holding on financially.

Farm diesel prices have jumped from an average of $2.94 a gallon last summer to $4.57 currently, with most of the increase occurring in the two months since the US attacked Iran and the closing of the Strait of Hormuz, through which a quarter of the world’s oil supply normally travels.

That’s a huge difference for farmers with equipment that can suck a half-gallon of diesel or more per acre, a typical acre of corn getting between three and five passes over the course of a growing season. The math for Delmotte, who farms 1,200 acres: an additional $6,000 to $10,000 in fuel costs. 

Between 20% and 30% of the world’s fertilizer also travels through the Strait of Hormuz. With that supply stalled for now, fertilizer prices have jumped as much as 49%.

Between fuel and fertilizer price hikes, the average farmer could pay $22,000 more this season, according to Michigan Ag Today. Prices of both diesel and fertilizer have continued to rise since that estimate was made in early April.

Those costs are getting attention in Washington. The Department of Justice may be investigating price collusion by fertilizer manufacturers, according to a report by Bloomberg News.

US Department of Agriculture Secretary Brooke Rollins was pressed on the high cost of fertilizer in a visit this month to Michigan. Rollins said prices would decline after the war in Iran ended. But even after the Strait of Hormuz is reopened, it could take six months to clear mines before passage returns to normal.

“You need a lot of nitrogen (fertilizer) to grow corn,” said Jonathan LaPorte, farm economist with the Michigan State University Extension service. With rising costs and flat or lower sale prices at harvest, LaPorte said farmers are asking, “Can I still make money on this crop?”

A recent Farm Bureau survey found that 48% of Midwest farmers can’t afford all the fertilizer they need this year. Less fertilizer means fewer bushels of corn come fall.

Almost 6 in 10 farmers said their farm’s financial outlook was getting worse, according to the poll.

There are several federal support programs that can help farmers survive in a down year, said LaPorte, but those funds aren’t certain and often have a long lag time, making it difficult for small farmers to count on them in their budget. 

Michigan farms employ 98,000 workers, according to state data, and have a direct economic impact of more than $74 billion annually. Yet individual farmers are at the mercy of commodity markets and weather for which they have no control. An unusually wet spring or a dry summer can devastate a crop. And even if the weather is perfect, the sale price at harvest could be lower than the money invested.

That’s particularly true this year, when costs have gone up but the price farmers can get for their crop has stayed flat or declined.

“If they’re on the bubble, this could be make or break for them,” LaPorte said. “We’re adding on to what has already been a tough cycle.”

The number of farms in Michigan has declined 7% since 2017 to 44,000, according to federal statistics, which don’t give a reason for the decline.

Even before the current cost crisis, Michigan lost about 1,300 farms between 2023 and 2024, a rate of a farm shutting down or being absorbed by a larger farm every 7 hours.

“It’s setting up a perfect storm where … this could push out the next wave of farms,” Laporte said.

“The costs are astronomical,” said Monroe County farmer Delmotte. “There are farm operations that are in serious financial trouble because they’ve bled through a lot of equity to pay the bills that the crop isn’t paying on its own.

“At some point, that dries up.”

Delmotte shared a phone video of his then-11-year-old daughter running a combine harvesting corn last fall. He estimates that rising costs from the war have cut his income by about 25% since that video was shot.

“I have three children, and they’re the same as every family. They want to play sports and participate in things with their friends,” he said. “Imagine if you had to go home and tell your children, ‘Hey, we’re taking a 25% pay cut.’ It’s not a good situation.”

For now, Delmotte is preparing to plant corn and soybeans like he does every year. Within about six weeks, he’ll need to buy about 25,000 gallons of fertilizer to spread across young corn shoots. Even if the blockade in the Strait of Hormuz is lifted today, it’s unlikely prices will drop before he has to pull out his checkbook.

Just the year-to-year cost increase of that fertilizer will be about $37,500 — the equivalent of more than eight semi-trailers full of corn.

“Most farms are losing money on every acre they grow,” Delmotte said. “And yet we show up every day with hopes that things will turn around. We are eternal optimists.”

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