US Military Strikes on Iran Impact US Agricultural Production

People’s Financial News, March 15 — Since the U.S. and Israel launched military strikes against Iran, tensions in the Middle East have continued to escalate. Many American farmers and agricultural workers are worried that the Middle East conflict will cause fluctuations in the U.S. agricultural product market prices, disrupting the spring planting plans for the new year and potentially severely impacting U.S. agriculture and farm yields this year. Currently, it is the spring planting season in the Northern Hemisphere. Reuters, citing data from the American Fertilizer Institute, reports that the U.S. heavily relies on imports for fertilizer, with about half of the annual urea fertilizer used in some years coming from imports. At present, U.S. spring planting is experiencing a shortage of about a quarter of the required urea supply. The Strait of Hormuz accounts for about one-third of global fertilizer shipping trade. After the Israel-U.S. attack on Iran, global trade was disrupted, leading to a one-third increase in global fertilizer prices. Analysts point out that some fertilizers originally destined for the U.S. may be diverted to other regions because buyers elsewhere are offering higher prices. Reuters reports that current U.S. fertilizer import prices are over $100 lower than global prices. This means some ships about to arrive may reroute to higher-priced destinations or transship to earn more profit. Meanwhile, domestic food prices in the U.S. are beginning to rise, with futures prices for soybeans, corn, and wheat on the Chicago Mercantile Exchange reaching recent highs. Many farms are selling off last year’s corn and soybeans, which were stockpiled due to low prices, to ethanol producers or large multinational grain companies. However, analysts believe that the short-term rise in grain prices is not enough to offset the losses farmers face from the U.S.-Israel military strikes on Iran, especially since many large grain companies have nearly exhausted their storage facilities in the U.S. and find it difficult to continue large-scale purchases. Farmers are concerned that, influenced by multiple factors, price fluctuations in the U.S. grain market will intensify, bringing more uncertainty to future operations. (Xinhua News Agency)