By Mary Hightower
The surging prices of war-restricted fuel and fertilizer shipments through the Strait of Hormuz and Red Sea are expected to cost Arkansas farmers more than $343 million this year — and that’s conservative, according to an analysis from the University of Arkansas Division of Agriculture.
The analysis by Ryan Loy, assistant professor and extension economist, was released on Monday. Scott Stiles, extension economics program associate, provided research on the fuel and fertilizer prices. The research is supported by the Fryar Price Risk Management Center of Excellence.
“Fuel and fertilizer markets have been under pressure since the beginning of the Iran conflict, mainly because of disruptions at two shipping chokepoints,” Loy said. “Iran has largely blocked traffic through the Strait of Hormuz since early March, and in September, the strait has been seeing record low transits of crude oil tankers.
“At the same time, the Houthis resumed attacks on Red Sea shipping in July, adding to the strain on supply chains already hit by the Hormuz closure. Both routes are major corridors for crude oil and fertilizer,” he said.
Loy and Stiles’ price analysis of the diesel that Arkansas farms use for planting, harvesting, irrigation and other functions will be built in to the 2027 Crop Enterprise Budgets. This online tool is used by farmers to determine which crops will keep their operations afloat.
Source : uada.edu