Fertilizer Price Surge
The unrelenting increases in the price of fertilizers are on many farmers’ minds, evidenced by conversations at Husker Harvest Days and discussion during last week’s Nebraska Farm Bureau Board meeting. The price increases this year are noteworthy. Figure 1 shows monthly indexes of chemical, fertilizer, and fuel prices from the USDA National Agricultural Statistics Service (NASS) with 2011 as the base year.
Figure 1 clearly shows the price increases since the beginning of the year, with the fertilizer index 23 percent higher compared to last year. A September 22 story on the Nieuwland Feed and Supply website reports that anhydrous prices are 77 percent higher year-over-year, UAN28 and potash prices are up 74 percent, and MAP is 73 percent higher. DTN reports potash prices reached a 10-year high this month.
Figure 1. Index of Prices for Chemicals, Fertilizer, & Fuels—2011=100%
Several factors are to blame for the higher prices. Key production facilities in Louisiana shut down temporarily in February due to freezing temperatures and rising natural gas prices. Facilities were shuttered again when Hurricane Ida came ashore. European facilities are also halting production due to high natural gas prices. The shutdowns exacerbate already tight supplies. Natural gas, a key component in fertilizer production, has seen prices increases of more than 80 percent since January also pushing fertilizer prices higher. And earlier this year the U.S. International Trade Commission voted to impose countervailing duties on phosphate imports from Russia and Morocco. Imports from these two countries combined account for 75 percent of U.S. phosphate imports.
To rub salt in the wound, chemical prices are also significantly higher for many of the same reasons. Global supplies of chemicals used in producing crop protection products are increasingly tight due to COVID-related logistical problems. Now, plant shutdowns are shrinking supplies further. Hurricane Ida shuttered Bayer’s largest glyphosate plant in Louisiana. And glyphosate production in China is down due to the enforcement of more stringent environmental regulations.
All this means crop input costs for 2022 will be higher. Crop producers will want to visit with their input suppliers on a regular basis and monitor the situation closely, especially to assure supplies of needed product are available when needed. Given the number of factors contributing to higher prices, it seems higher fertilizer and chemical prices are likely here for a while.