Farmers in Germany are feeling the impact of the fallout from the Iran conflict and its toll on the global fertilizer supply chain.
Despite a memorandum of understanding (MoU) reached by Iran and the United States, three months of military operations have sent shockwaves through international crude oil and natural gas markets, and the knock-on effect has piled up pressure on farmers' costs on diesel fuel, fertilizer, and transport.
In northern Germany's pastoral belt near Hamburg, smallholder farmer Jens said every step of his farmwork depends on diesel-powered machinery, including spring tillage, seeding and fertilization, crop protection spraying, harvest and haulage.
The soaring costs of diesel and fertilizer have made his work difficult. His fertilizer spending alone has risen 20 percent since the beginning of this year.
To keep costs in check, he has been forced to cut fertilizer application rates, struggling to balance costs and yields.
"The predicament we're facing is that the farmgate price we get for our produce is almost exactly what it was 35 years ago, while our production costs just keep skyrocketing," said Jens.
"I've gone back to using farmyard manure, partly just to cut costs. I barely buy synthetic fertilizer anymore. Take rye, for example, with today's fertilizer prices versus the actual yield, putting fertilizer on it is not cost-effective. You'd end up losing money. Look over there, that field has got grass growing on it now. But it was supposed to be the field for rye. I switched it for grass plantation. The upside is that the grass stays put for years. No plowing, no diesel bill," the farmer added.
Jens said that even after hearing about the MoU, he does not expect energy supplies and prices to return to pre-conflict levels soon.
"Everyone hopes things will go back to how they used to be, but I'm not holding my breath. There are armed conflicts flaring up in many places in the world. They aren't getting resolved peacefully anytime soon," he said.
Soaring fuel, fertilizer costs hit German farmers hard
Soaring fuel, fertilizer costs hit German farmers hard
