Skyrocketing fertilizer costs for the 2022 growing season have been making headlines for months. XtremeAg farmers reported that prices have risen to record highs when they at least doubled since the 2021 growing season. According to a DTN survey in November last year, 7 of 8 major fertilizer prices posted an average cost of US$522 a ton in the previous month. Another report published by RFD-TV in December showed that recorded prices are starting to slow down, with just 3 out of the 8 major fertilizers moving slightly higher. Anhydrous ammonia fertilizer led the way, being up 16% from last month. 10-34-0 (liquid ammoniated phosphate) fertilizer was up 7% and urea was 5% more expensive compared to November. Despite the soaring fertilizer prices, demand remains high, according to University of Illinois Farm Policy News. In fact, as Gary Schnitkey, an economist with the University of Illinois, predicted in November, fertilizer costs will be about US$100 per acre higher for corn and US$50 higher for soybeans. The rising costs mean that consumers will be paying more for food at the supermarket this year, as many, including Bloomberg, predict.
And what are farmers around the world, such as in the United States and India, doing to overcome high fertilizer prices? As market analysts and grower groups assess the situation, farmers across the US make strategic plans on how to approach the problem in the upcoming season. For example, Matthews Family Farms in East Bend, North Carolina, feels “very blessed” that the price of ortho phosphate liquid fertilizer has only increased 12% to 15% over the last year. That’s this farm’s primary source of phosphorus, potassium, and micronutrients. However, the price Matthews pays for his main nitrogen source — a 24% nitrogen, 3% sulfur liquid product — has now soared from US$170-238 per ton last summer to US$550-600 per ton in December, and that’s if the supplier even has the product available. To deal with this challenge, the farm already uses as much poultry litter as they can get. The farms in the region are lucky because poultry and eggs are North Carolina’s top agriculture commodity, so litter is a great local option for increasing fertility and organic matter in the soil. “You get a lot more benefit from it vs. commercial fertilizers, although we are dependent on the commercial products to produce a sustainable food source for consumers,” Matthews says.
On the other side of the globe, farmers in India who are also squeezed by soaring prices and massive shortage of fertilizers are turning to the black market and paying exorbitant prices for supplies. The shortfall has led to a thriving black market where subsidized crop nutrients are sold illegally at prices much higher than levels set by the government. Shady agents have been busy fielding requests from farmers who approach them in desperate need of fertilizers, especially since the key planting season has been underway. As millions of households all across India depend on agriculture for a living, farmers say they have a tough choice to make: either to cut the use of fertilizers and risk lower production, or pay sky-high prices on the black market. The South Asian country is one of the worst affected by a worldwide fertilizer crisis. Prices of crop nutrients have risen sharply as tight coal and natural gas supplies forced some fertilizer plants in Europe to close, while China and Russia have also set restrictions on exports to safeguard domestic supply. These hurdles are predicted to keep fertilizer prices elevated through the first half of 2022.
