Middle East Conflict Could Push Diesel And Fertilizer Prices Higher
Brownfield
An ag economist says the military conflict in the Middle East will likely raise prices for two critical inputs for farmers.
Gregg Ibendahl with Kansas State University says oil prices directly impact diesel fuel. “If you’re talking about oil about $100 (per barrel) ,then your probably talking about a significant increase in the diesel price. I don’t think we’re there yet. I don’t think we’re going to spike that high. It will affect farmers more than consumers.”
Ibendahl says crude oil prices have shot about $10 per barrel higher since the conflict began to the mid $70s.
He tells Brownfield he’s closely watching the fertilizer market. “Any increase in the price of oil will have a corresponding affect on fertilizer prices. Fertilizer is by far and away a bigger percent of total farm expenses than what fuel is. There is probably the biggest worry for farmers is that if oil prices go through the roof, then I think you’re going to start to see fertilizer prices kind of matching that at some point and time here.”
He says he’s not as concerned about the supply of oil since the U.S. has increased its production over the last 20-30 years, but there could be some disruption for fertilizer imports.