Like many potato farmers, Grant Morris of Schneider Farms in Pasco, Washington, had already spent over $1,000 an acre even before putting spuds in the ground. This year, like last year, he hardly expects to turn a profit.
“Everybody’s just hoping to break even,” said Grant Morris of Schneider Farms, based in Pasco, Washington. “If we don’t lose money, I’ll come out happy.”
Raw potato prices cratered in 2023 due to high yields, and have stayed low since then. Now, the war in Iran, and the extended closure of the strait of Hormuz, has caused the costs of fertilizer and fuel — which were already getting more expensive — to skyrocket.
“They’ve all been different shades of red,” said Josh Linville, vice president for fertilizer at the financial services firm StoneX. “Farmers are not making money this year.”
These drastic spikes in input prices since the end of February have eaten into the already razor-thin profit margins that potato farmers were expecting this season. Production expenses were already increasing even before the war broke out, adversely impacting all farmers. Because of these pressures, farmers have been forced to make difficult decisions — either take on additional debt to meet their input needs, or reduce fertilizer application, which means lower yields.
While many other crops are primarily sold on the open market, potatoes are mostly contracted before harvest to processors of frozen french fries and other potato products. These contracts obligate farmers to deliver a predetermined quantity to their buyers, so opting not to buy expensive fertilizer is not an option.
“We still have to grow the same crop. We still have the same job to do,” said Morris. “Mother Nature doesn’t care that the price of fertilizer is up.”
Contracts usually allow farmers to lock in a predetermined profit before harvest. Even so, a global oversupply of potatoes has driven overall prices down significantly. The grower return index published by North American Potato Market News on May 6 shows russet potato returns below $2 per hundred pounds, way below farmers’ breakeven point.
According to Patrick Hatzenbuehler, an associate professor and extension specialist in agricultural economics at the University of Idaho, this has also brought contract prices down over the last couple of years.
Potato farmers are not the only ones under financial strain. According to an April Farm Bureau survey, upwards of 70% of farmers were unable to afford all their fertilizer needs this season.
“The American Farm Bureau Federation survey reflects sustained financial strain, with many farmers now in a fourth consecutive year of losses,” said Faith Parum, an economist at the Farm Bureau. Although the survey did not include results specific to potato farmers, Parum added that as a fertilizer-intensive crop, potato farmers are likely to experience high cost pressures.
In Wisconsin, for example, potato farmers still had to purchase approximately 30% of their fertilizer needs after prices were impacted by the war, according to a survey from the Wisconsin Potato and Vegetable Growers Association. The organization’s executive director, Tamas Houlihan, also said that farmers needed to purchase more than half of their required fuel after diesel prices rose drastically.
The costs of nitrogen fertilizers, such as urea and ammonia, that largely pass through the strait of Hormuz have risen more than 30% since mid-February. In the case of potatoes, many farmers will apply fertilizer after harvest season in the fall and then supplement it with fertilizer application in the spring, when they irrigate their crop. Because of this, although many prebook some fertilizer, potato farmers rarely have all their required fertilizer before planting.
According to Linville, although the United States has a relatively stable supply of fertilizer, demand from countries that lack strong supplies has driven up prices significantly, even for domestic fertilizer. As a result, farmers are left with little choice but to pay up.
“You plant the crop, you spend the money, and you cross your fingers all year and say, ‘Boy, I sure hope this improves by the time we harvest,’” said Linville.
With negotiations at a stalemate and the strait of Hormuz still severely restricted, the markets for fuel and fertilizer are still severely inflamed. In the case of fertilizer, if price pressures linger, farmers may even struggle to afford the prices that they would normally prebook for the following year.
“I think a lot of people are kind of really concerned about the fall 2026 fertilizer availability and prices,” said Hatzenbuehler. “In that sense, the 2027 growing season may be potentially impacted even more than this current season.”
And for farmers like Morris, whose crop is all planted and awaiting harvest, the looming question is not how high prices are now, but whether they will ever come back down.
“Prices go up and then they don’t ever really come back down to the same level,” said Morris. “So that’s what I’m more afraid of, just the long-lasting effects of increased prices.”