Farmers across the country are struggling to keep up with soaring fertilizer prices. According to the American Farm Bureau Federation’s Market Intel Report, prices are increasing up to 300% in some areas, forcing producers to rethink their growing plans for the upcoming year.
Global shortages of raw fertilizer ingredients, increases in global fertilizer demand, increased energy costs, supply chain disruptions, and trade duties are all contributing factors, making the solution to the problem difficult to pin down. The dynamic has pushed prices to more than double their ten-year average.
Carlyle Currier, President of the Colorado Farm Bureau, expressed his concern. “The rise of fertilizer prices is a big concern for farmers here in Colorado. Our farmers produce goods that we all rely on, and increasing fertilizer prices makes it harder to sustain these operations.”
While the American economy is projected to grow steadily in 2022, farmers face a challenging year ahead. Production disruptions in China and India will take time to recover from the impacts of Covid-19, and the ongoing input inflation issues will likely continue to affect producers well into 2022. Inflation has also impacted the labor market in rural America, and farmers will continue to face staffing shortages.
Paired with the costs of labor, fuel, machinery, and seed, farmers are experiencing a roughly 15% increase in the cost of production. Despite futures prices appearing attractive, the high input costs demonstrate the shared reality of marginal gains for America’s farmers in 2022, according to CoBank economist Rob Fox.
“Unless things change quickly, 2022 will be another difficult year for farmers and ranchers,” said Currier.
Many farmers have resorted to cutting back on fertilizer usage to counter these challenges. Still, these cost-saving measures have the potential to reduce yields and diminish harvests, further depressing farm income. Many are warning of higher food prices if the situation continues to reduce supplies of critical commodities.