JANESVILLE — Area farmers like Janesville’s Doug Rebout say they are not immediately feeling the pain over soaring costs for diesel fuel and fertilizer.
It could really start to hurt later this year, especially if the war in Iran drags on longer, and the Strait of Hormuz remains choked off to trade because of ongoing military and political conflict in the region.
Rebout grows corn and soybeans on family farmland just west of Janesville. The local farmer said he bought much of the diesel he’ll use this farming season on an earlier contract he agreed to prior to recent price spikes that have come alongside the Iranian conflict.
Rebout said he spent $120,000 on diesel fuel for off-road and on-road machinery last year. Later this year, when he buys fuel for the next farming season, he estimates it could jump to $200,000 — a 66% increase from a year ago.
“We don’t know for sure. That’s just a forecast of what could come later,” Rebout told The 69.
His statements came Tuesday as U.S. Sen. Tammy Baldwin visited his farm.
Baldwin spoke with Rebout and two other local farmers at Rebout’s farm as they sat at a short roundtable, in the shade of a building used to store farming implements and hay bales.
Baldwin told the farmers about a bipartisan Congressional bill she supports called the , which would require fertilizer makers to submit weekly reports to the federal government on pricing and production and distribution volumes.
The bill was introduced in March by John Thune, a Republican Senator from South Dakota.
Baldwin, a Democrat, framed the bill alongside statements she made that tie spiraling diesel fuel prices directly to the ongoing Iran conflict.
She called it an “illegal war” several times, blaming Republican President Donald Trump for unilaterally declaring U.S. involvement without initially seeking Congressional approval.
“The war in Iran is a war of choice,” Baldwin said, pointing out that the bottlenecking and closure of the Strait of Hormuz during the conflict has crimped about a third of the global supply of fertilizer ingredients and diesel.
She said small-scale farmers are absorbing a disproportionate amount of pain for diesel fuel prices that are $2 a gallon higher than at this time last year.
“We are seeing the prices here skyrocket,” Baldwin said. “For many farmers, probably particularly for smaller operations that don’t purchase their products or get a contract for their products the year before, they’re seeing in real time the need to pay astronomical prices to full up their diesel fuel tanks.”
Baldwin said there’s broad bipartisan support for federal bills like Thune’s fertilizer pricing transparency policy.
But when it comes to Congressional efforts to force the end of U.S. involvement in Iran through the 53-year-old War Powers Act, Baldwin said so far just “four” Republicans in Congress are siding with Democrats.
She characterized it as partisanship, calling it “disappointing.”
An end to U.S. involvement in Iran would not end a complex set of pressures on the Strait of Hormuz immediately, and it might not lead to an immediate falloff in fuel or prices.
Meanwhile, the pressures farmers face with diesel fuel costs are often hidden from the public.
It’s not just tractors and trucks that run on diesel. During a drought or dry conditions, farmers rely on diesel fuel to run large irrigation systems.
Over the weekend, large areas of farmland with young crops in the Town of La Prairie were dry enough that farmers were running huge irrigation systems late in the day.
Rebout is President of the Wisconsin Soybean Association. As some economists, market analysts and farmers like Rebout point out, farmers, like any consumer paying a fixed price for fuel, could be stuck with higher costs for months.
“I was just talking to a guy from the local co-op that works on buying for next year, and they’re going to start buying in July for next year’s (fuel),” Rebout said. “They said even if the war in Iran were stopped now, and the Strait of Hormuz was open, it would take six months to get things figured out before prices would even think about coming down.”
