This guest commentary was provided by The Fertilizer Institute:
Today’s high fertilizer prices are hardly a secret. The underlying reasons for the cost of these critical products, however, are multiple, and ultimately determined by a complex interplay of domestic and international political and economic factors. In fact, fertilizer prices are generally set by supply and demand dynamics just like other globally traded commodities, such as corn, soybeans, and wheat. The recent increases are even more pronounced given that many fertilizer prices were near 10-year lows from mid-2019 to mid-2020. To say that farmers have noticed would be an understatement, even though fertilizer prices in the United States are in many cases among the lowest in the world.
Fertilizer is essential to growing the food, fuel, and fiber our world relies upon. Because fertilizer is often a farmer’s largest input expense, any increase is going to be felt. Going without fertilizer is not an option, so farmers are left with tough choices. Do they stay the course hoping crop prices remain high and help buoy farm profitability? Do they plant a less fertilizer-intensive crop in the spring? Do they use less product and hope their yields don’t suffer? No matter the decision made, it is understandable that farmers are left uncertain, fearful, and even angry about how to handle the current rise in prices.