MARC JACOBS
Hutch Post
Dry Conditions, Rising Costs and Market Uncertainty Weigh on Kansas Agriculture
HUTCHINSON, Kan. — Persistent dry conditions across Kansas and the central Plains are raising concerns among farmers and ranchers as they head into a critical growing season, according to western Kansas agricultural banker and farmer John Jenkinson.
Speaking during a monthly ag update on the BW Morning Show, Jenkinson said drought conditions are widespread and worsening, particularly in western Kansas.
“We’re very dry, and we’re very concerned about this next wheat crop and the fall crop getting ready to be planted,” Jenkinson said. “It’s not just us. It’s across the state.”
Recent data from the U.S. Drought Monitor shows expanding areas of moderate drought across Kansas and neighboring states, including Oklahoma and Nebraska. Jenkinson noted the situation extends beyond state lines, with hundreds of thousands of acres burned in recent wildfires across the region.
“This is really becoming a concern,” he said. “It goes into eastern Colorado, and even the mountains have only received about 50 to 60% of their normal snowfall.”
Jenkinson compared current conditions to historic drought periods in the 1980s and early 2010s, warning that early-season warmth combined with a lack of precipitation could have long-term impacts.
“We really need rain, and unfortunately, there’s not much in the forecast,” he said.
Fertilizer Costs and Global Supply Concerns
In addition to weather challenges, rising fertilizer prices are adding pressure for producers. Jenkinson pointed to global supply chain issues and geopolitical tensions as key drivers.
Much of the world’s fertilizer components move through the Strait of Hormuz, a critical shipping route affected by ongoing conflict in the Middle East. As a result, prices have surged in recent weeks.
“We’re dependent on just a few suppliers overseas,” Jenkinson said. “We used to have more production here in the United States, but regulations pushed companies out.”
He also referenced a recent class-action lawsuit filed by a large Iowa farming operation against major fertilizer producers, alleging price manipulation during the COVID-19 pandemic that has yet to ease.
“When you only have a handful of companies controlling supply, they can control price,” Jenkinson said. “That’s what this lawsuit is about — lack of competition.”
Markets Driven by Uncertainty
Despite the release of the latest World Agricultural Supply and Demand Estimates (WASDE) report, Jenkinson said markets are currently being driven more by global uncertainty than traditional supply-and-demand fundamentals.
“There was really nothing new in that report,” he said. “Right now, the market is being driven by speculation and fear.”
He added that recent gains in grain prices are closely tied to fluctuations in crude oil, rather than agricultural fundamentals, and could quickly reverse.
“My concern is those prices could disappear overnight if this conflict winds down,” Jenkinson said.
Wildfires, Cattle Losses and Industry Strain
Wildfires across Kansas, Oklahoma and Nebraska have further strained the agricultural sector, particularly for ranchers. Jenkinson said some producers have lost cattle, grazing land, fencing and even homes.
“That’s their livelihood,” he said. “They’re still trying to recover.”
Dry conditions combined with abundant leftover vegetation from last year have created dangerous fire conditions across the region, increasing the risk of rapid wildfire spread.
At the same time, labor disputes are adding pressure to the cattle industry. A recent strike at a JBS meatpacking plant in Greeley, Colorado, is expected to disrupt supply chains and increase costs for both producers and consumers.
“When a plant shuts down, cattle have to be transported farther, which increases costs,” Jenkinson said. “It’s bad for everybody.”
He added that consolidation within the meatpacking industry continues to create challenges, limiting competition and flexibility in the market.
Looking ahead
Jenkinson said the combination of drought, rising input costs, wildfire damage and market uncertainty presents a difficult outlook for agriculture in the months ahead.
“What we need is balance, and right now we don’t have it,” he said. “There are a lot of moving pieces, and unfortunately, many of them are out of our control.”