A MARTÍNEZ, HOST:
We've been reporting on how the fallout of the U.S. war on Iran is hitting Americans' pocketbooks. But one group of people - farmers - is being hit especially hard. The closure of the Strait of Hormuz has sent diesel and fertilizer prices soaring, further straining American farmers already working on thin margins. John Halcomb is here to talk about this with us. He is a fifth-generation farmer, the owner of Walnut Grove Farms, a 10,000-acre farm in south central Kentucky. He joins us now from his home in Adairville. So, John, tell us first, what do you grow on your farm?
JOHN HALCOMB: We raise corn, wheat, soybeans, also some barley and oats and a few other smaller acreages, but primarily corn, wheat and soybeans.
MARTÍNEZ: Corn, wheat and soybeans. OK. So, John, I know that farms need at least two things - fuel and fertilizer - to work properly. So let's start with the fuel. What kind of changes in price have you seen since the U.S. went to war with Iran?
HALCOMB: Yeah, absolutely. So we also have a small trucking company, and so I track fuel prices very closely.
MARTÍNEZ: Oh, OK.
HALCOMB: Yeah. So our fuel prices in the middle of January were at about a two-year low, around $3.35 a gallon. And now we're up to $5.38 a gallon. So right at $2 a gallon increase.
MARTÍNEZ: OK. So what does that mean for what you can do with that company and also on the farm? Or maybe what you can't do.
HALCOMB: Yeah, for sure. So - well, on the trucking side of things, we're able to add a fuel surcharge, but on the farm side of things, farms don't get to add a fuel surcharge. And so when grain prices aren't moving up with the cost of fuel, it just means that our already bad margins are getting worse.
MARTÍNEZ: Wow. So you - yeah. You're definitely burning that up when it comes to the fuel prices. Now, when it comes to fertilizer, about a third of the world's fertilizer supply comes through the Strait of Hormuz. I think, you know, John, I don't know if a lot of people knew about that before all of this happened with Iran. I know spring planting season is already upon most of us in the country here. Are you expecting the impacts from the closure of that waterway when it comes to fertilizer?
HALCOMB: Fortunately, for us - and I think for a lot of farmers - we had prices already contracted for our spring needs. But for any last-minute needs right now, we're seeing increases in the 25 to 30% range locally over what we had purchased previously. And I think, in my opinion, the real concern is this fall, depending on how long the closure drags on and what the long-term impact is, that's when we'll see potentially larger impacts on - you know, whether the impacts to crop selection and eventually yields, fertilizer availability. So that's what really concerns me longer term.
MARTÍNEZ: What about - are you having conversations with other farmers about this? What are they saying?
HALCOMB: Oh, absolutely. I mean, everybody is just on edge, I would say, waiting to see what the long-term impact is going to be.
MARTÍNEZ: If you don't mind me asking, John, are you someone that voted for President Trump?
HALCOMB: I did not. I'd say I'm probably in the minority in the ag industry, I guess. But in my opinion, I've always seen Trump as the disruptor candidate, and as a small business owner, I think stability and consistency are important for being able to make decisions, and that's not what we get with Trump.
MARTÍNEZ: Yeah. President Trump said on social media over the weekend that the U.S. won't accept price gouging for fertilizer and that he has American farmers' backs during this uncertain time. And late last month, I know the administration announced new ways to help farmers, such as new federal loan guarantees. Does any of that make you feel that he has American farmers' back?
HALCOMB: I don't know. It seems like there's always a lot of rhetoric, supportive rhetoric, and it's always, you know, a promise for the future. But when it comes to actual policies and actual - what's actually happening on the ground day to day, it's not panning out. So it doesn't make me feel much better, no.
MARTÍNEZ: So what does all this uncertainty mean for the consumer, someone like me?
HALCOMB: I mean, I think that it may be a few months down the road, but we'll see what happens if farmers decide to pull back on how much we use for inputs or if we just plant fewer acres. And this isn't just in the United States. I mean, it's a global conversation. You know, we could end up with tighter supplies, which could drive up food costs eventually.
MARTÍNEZ: That's John Halcomb, the owner of Walnut Grove Farms in Kentucky. John, thank you very much.
HALCOMB: Thank you. Transcript provided by NPR, Copyright NPR.
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