Growing costs for local farmers hurt consumers | News, Sports, Jobs

Brian Barth is among Mahoning Valley farmers feeling the effects of rising prices, and now rising interest rates, which will in turn impact their consumers. Barth and his brothers own BNB Farms Inc., which includes 3,000 acres among 40 parcels from Mount Jackson, Pa., to Poland.

Staff photo / Emily Scott

Most Americans feel the strain rising fuel prices put on their wallets, but for one group it’s not just about the price, it’s also about the resulting shortages.

Local farmers are feeling the effects of rising prices, and now rising interest rates, which will in turn impact their consumers.

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“It’s more than just the price of fuel right now,” said Brian Barth, who with his brothers Scott and Dan own BNB Farms Inc., which includes 3,000 acres among 40 parcels from Mount Jackson, Pa., to Poland.

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“The situation with fuel has caused so many shortages and price increases for other products we need to farm. Consumers don’t realize they are one season away from not having the goods they expect from us,” he warned.

Agriculture accounts for about 20 percent of Ohio’s gross domestic product, and 1 in 7 Ohioans are employed in the industry, according to World Atlas.

The war in Ukraine, whose flag represents a blue sky over a field of wheat, has affected greatly farmers 5,000 miles away in the Mahoning Valley. Together, Russia and Ukraine export more than a quarter of the world’s wheat. Russia alone exports about a quarter of the world’s natural gas.

The war has led to instability for both countries, and their exports have dropped as a result. They have the same growing season as the United States, so the war comes at a time when American farmers would usually rely on their exports of natural gas and fertilizer for their crops.

Corn loves nitrogen, a fertilizer for the crop. This year, it’s an expensive product due to a worldwide shortage of natural gas. Nitrogen for Barth’s 5,000-gallon tank usually costs about $7,500; now it’s $25,000.

Natural gas also is needed once corn is harvested, to dry it slightly so it does not rot.

Barth usually plants half of his fields with corn and the other half with soybeans. This year, he planted one-third of the fields with corn and two-thirds with soybeans.

He said many other American farmers likely did the same, but until the U.S. Department of Agriculture releases its yearly planting report, there is no way to know for sure.

A corn shortage likely will result from rising nitrogen prices, Barth predicted.

SUPPLY CHAIN

Fertilizer prices have doubled or tripled for farmers because of many supply-chain issues compounding at once.

Schwartz Farms in Cortland is paying $90 to $120 per acre to fertilize its crops. Last year it paid $20 to $30 per acre.

“There were a lot of guys who bought seed, were prepared to plant, and were totally blindsided by fertilizer prices,” said John King, Schwartz Farms operating manager.

Off-road diesel, which is used in farming equipment, has increased $2 a gallon from this time last year. Together, fuel and fertilizer costs for Schwartz Farms increased 200 percent, which has added about $350,000 to the farms’ input costs.

Schwartz Farms grows corn, wheat and soybean, as well as a handful of specialty crops. It also contracts about 14,000 acres in Ohio, Pennsylvania and New York.

PRICE TAGS

Because of higher input costs, farmers are able to sell at higher prices.

Wheat has doubled in price, which Rick Molnar of Molnar Farms in Poland said has helped cover some of the initial costs.

“There’s not much we can change in our input costs,” Molnar said. “We have to do what we have to do and look forward for next year.”

He now can sell wheat for $10 to $11 per bushel, up from $5 a bushel last year. This has caused his farm to handle more money than usual, but it will go into paying for the high input costs. He doesn’t think the farm will see higher profits.

Soy and corn are used as alternatives to wheat. Because of the high price of wheat, the demand for corn and soy has increased, driving up their prices.

Soybean is currently selling for about 1 1/2 times the usual price, and the price of corn has doubled. Barth doesn’t think it will be enough. He already took out a loan to help with this year’s input costs, and he will likely have a smaller profit margin than most years.

NEXT YEAR

“This year, I think most farms will be OK,” King said. “Next year as costs continue increasing is where we might see some people having to take out some big loans and make some tough decisions.”

Last week, the Federal Reserve raised interest rates by three-quarters of 1 percent, the sharpest hike since 1994. This could hurt local farmers for years to come, he said.

Because crops are being sold at higher prices this season, the seeds to plant next year will be higher, King noted. Many farms will have smaller profits this year, which could make it hard to plant next year.

Later this summer and fall, farmers usually start putting in orders for seed and other necessary materials, such as fertilizer, for planting in the spring. Because costs are so high now, this could encourage some to wait.

All of these added costs farms are facing now will continue to trickle down to consumers come harvest time.

CONSUMERS

“Costs for consumers definitely could get worse, unfortunately,” said Nick Kennedy, Farm Bureau organization director for Columbiana, Mahoning, Portage and Stark counties. “But, we are already seeing higher prices in the grocery store as a result of these problems.”

Corn, wheat and soy are all used in a vast array of products, from foods to cosmetics to fuel to adhesives. So, high prices of these crops affect many other markets. This includes the livestock industry.

Farmers who raise livestock rely on those who grow crops for basic necessities such as feed, straw and hay. It will become more expensive for these farmers to raise their animals, which will likely cause many to raise less.

This, in turn, will cause a shortage of meat, dairy products and eggs — raising prices for consumers on these items.

“The farming community relies on itself for so many of the products we use every day,” King said. “When one area is hurt, we all hurt.”