U.S. fertilizer prices rising
With European plants being shut down, global supplies are tightening and North American fertilizer costs are rising.
Weekly North American fertilizer prices rose by over 11 percent Friday, the most since March, as an energy crunch in Europe forces some plants to close or curtail production, according to an index by analysis organization Green Markets published in a Bloomberg report.
Natural gas is the number one input for most nitrogen fertilizer and the common nitrogen fertilizer, ammonia, in the U.S. Corn Belt saw prices rise nearly 24 percent.
“Nitrogen prices rose in response to a wave of European ammonia closures last week,” said Alexis Maxwell, an analyst at Green Markets.
“More than two-thirds of European ammonia production remains offline on high cost inputs, namely natural gas,” she added.
In addition, the cost of growing food in the U.S. is on track to jump by 18 percent, the most ever, and fertilizer prices are experiencing one of the top leaps in cost, according to the USDA.
The boom in America’s farming costs comes as the world increasingly turns to the U.S. for supplies as the war in Ukraine roils commodity markets and disrupts crucial grain shipments from the Black Sea, one of the world’s breadbaskets.
Furthermore, global food prices have touched records in recent months as inflation ripples through economies and levels of hunger are on the rise.
“Farmers will have to re-pencil crop budgets as nitrogen fertilizers are likely to remain higher for longer as pricey natural gas curtails ammonia production,” Maxwell concluded.