Among farmers, very few topics are being discussed as much as the skyrocketing cost of fertilizer and increasing concerns regarding availability. Given that fertilizer costs account for approximately 15% of total cash costs in the U.S., fertilizer prices are the number one issue on farmers’ minds as they begin to set up purchases for the 2022 growing season. Unfortunately, the fertilizer sticker price farmers in some areas are reporting is up more than 300% and delivery times are anyone’s best guess.
All major nutrients used in the production of primary row crops in the U.S. - nitrogen (in the forms of anhydrous ammonia, urea, or liquid nitrogen), phosphorus (diammonium phosphate – DAP and monoammonium phosphate – MAP), and potassium (potash) - have experienced varying degrees of upward price pressure. Compared to September 2020 prices, ammonia has increased over 210%, liquid nitrogen has increased over 159%, urea is up 155%, and MAP has increased 125%, while DAP is up over 100% and potash has risen above 134%.
Looking at the average price of each nutrient since September 2008, as collected in the Illinois cost of production dataset, anhydrous ammonia is up 118% above its average of $656 per metric ton, urea is up 101% from its $453 per metric ton average, liquid nitrogen is up 84% from its $305 per metric ton average, DAP is up 50% from its $550 per metric ton average, MAP is up 61% from its $555 per metric ton average, and potash is up 61% from its $485 per metric ton average.
Two-thirds of global fertilizer demand is driven primarily by six crops. Globally, corn represents about 16% of the farm-use fertilizer demand, with wheat a close second, representing about 15% of global farm-use fertilizer demand. Rice represents about 14% of global farm-use fertilizer demand, followed by vegetables at 9%, fruits at 7%, and soybeans at 5%.
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