CHESAPEAKE, Va. — Heath Cutrell is a fourth-generation farmer for his family farm, Cutrell Farms, in Chesapeake's Hickory community. Cutrell manages more than 6,000 acres of corn, soybeans, and wheat. With the United States' war with Iran escalating and Iran officially closing the Strait of Hormuz, Cutrell says he is concerned about what comes next for his farm.
"It definitely couldn't come at a worse time. Coming closer to the planting season, along with coming off of two bad years prior already — I just hope they lay a little easy on us, because it's been tough," Cutrell said.
The Strait of Hormuz — the narrow waterway separating Iran from the Arabian Peninsula — carries approximately one-third of the world's fertilizer supply, including the nitrogen and phosphate products farmers use to grow their crops. On Monday, Iran's Islamic Revolutionary Guard Corps announced the closure of the strait, vowing to "set any vessel on fire" attempting to pass through.
Unlike oil, there is no strategic reserve for fertilizer. Josh Linville, Vice President at StoneX, said a Strait closure "could be devastating" for fertilizer markets.
When Cutrell heard the news of the United States-Israeli war with Iran, he called his fertilizer supplier and asked him to stock up before prices climbed higher.
"I actually talked to our guy that we buy fertilizer from and told him to hustle and bustle and get us loaded up with fertilizer before the prices increase," Cutrell said.
His farm normally begins taking in liquid fertilizer around this time of year ahead of planting season, which is approximately six weeks away.
"We're right now getting close to starting to plant. There's no telling where the price will be set," Cutrell said.
Farmers are paid a fixed rate per bushel for their crops, determined largely by the federal government and commodity markets. The cost of fertilizer and fuel, however, is set by suppliers and fluctuates daily.
"The price of fertilizer as it goes up, our profit margins go down. It makes it really hard for us to make any kind of profit at all," Cutrell said.
Chesapeake is home to one of the largest farming communities in Hampton Roads, with farms concentrated in the southern part of the city including the Deep Creek, Hickory, and Great Bridge corridors. Virginia has approximately 39,000 farms statewide, with corn, soybeans, and wheat among the top field crops. With 40 to 50 percent of globally traded nitrogen fertilizer moving through the Strait of Hormuz, agricultural experts say the disruption could have significant consequences for farmers across the country.
Cutrell says the past two years have already been difficult, with input costs rising and profit margins shrinking. He says he knows farmers both locally and nationally who have gone bankrupt in recent years.
"I do know quite a few farmers that went bankrupt because of all of that," Cutrell said.
With another potential price spike looming, Cutrell says the pressure on farmers is only growing.
"The noose is getting tighter by the day," he said.
Cutrell says most of his grain is exported commercially rather than sold locally, but he believes the impact of the conflict will be felt broadly.
"As a whole, as a nation, I think it's going to tremendously impact all of us. Everything's going to be subject to go up in pricing — commodities and all that stuff," Cutrell said.
Cutrell says he hopes grain prices rise and fertilizer costs stabilize before planting begins mid-April.
"April 15th is coming quick," Cutrell said. "I just hope that our grain prices will come up. That's what I think any one of us grain farmers are hoping for right now — and maybe stabilize the fertilizer costs and fuel costs."
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