Soaring Fertilizer Prices Are About to Increase the Cost of Food

BLOOMBERG:

Ben Riensche, who farms 16,000 acres in Iowa, would be ecstatic to get $80 per acre selling his corn. But it’ll cost him $240 an acre to feed the plants with nitrogen, triple what he’s used to paying. And that’s not counting what he’ll spend on two other important fertilizers, phosphate and potash, which he says have each doubled in price since he purchased supplies for his 2021 crops.

Pandemic-induced supply bottlenecks and the rising cost of natural gas, a key production input, are among the factors sending fertilizer prices soaring. Add disruptions stemming from Russia’s invasion of Ukraine, and consumers will be paying more for almost every plate of food. “You think they squawk about having gas go from three to four dollars a gallon?” says Riensche. “Wait until the grocery bill is $1,000 a month.”

Russia is a major low-cost exporter of many kinds of crop nutrients. “No other nation has the same breadth of readily exportable fertilizer supply,” says Alexis Maxwell, an analyst with Bloomberg’s fertilizer analysis and news publication Green Markets. “Their fertilizers move to all continents.”

It’s hard to overstate the importance of fertilizer. The advent of synthetic ammonia fertilizers about a century ago is widely credited for helping food production keep pace with global population growth, freeing humankind from its Malthusian constraint. In that time, the planet’s population has gone from 1.7 billion to 7.7 billion, largely thanks to enormous growth in crop yields. Some experts have estimated that the global population might be half of what it is today without nitrogen fertilizer.

READ MORE

Join now!