A New Shock to the Global Fertilizer Market
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Russia’s decision to freeze fertilizer exports — as one of the world’s largest fertilizer suppliers — could further disrupt global agriculture and worsen existing price pressures.
In Argentina, for instance, this year’s corn yields are projected to hit a 10-year low due to widespread drought and fertilizer shortages.
Fertilizer prices had already surged throughout 2021 and entered a new crisis phase after Russia’s invasion of Ukraine, which triggered Western sanctions. In response, the Russian government suspended ammonium nitrate exports to protect domestic farmers amid soaring input costs.
Analysts noted that it remains unclear whether the ban applies globally or only to Western countries. Even Canada — a key fertilizer supplier to the U.S. — could see market volatility and rising costs as a result of tighter global supply.
Rising Prices and Farmers’ Adjustments
Farmers worldwide are now facing an unprecedented squeeze.
Matt Dorsey, a farmer in southern Idaho, said, “It’s almost impossible to predict fertilizer prices right now. Farmers are struggling more than ever to find labor and manage costs.”
Many U.S. farmers are shifting to alternative crops that require fewer nutrients or adjusting planting structures to cope with the high fertilizer prices. The rising costs are straining everyone in the supply chain, from farmers and distributors to consumers.
The combination of Western sanctions and Russia’s export restrictions threatens to reduce global fertilizer supply just as the new planting season begins. Experts compared the current supply shock to the toilet paper shortage of 2020, but on a far more severe scale — since Russia is among the top five fertilizer producers globally.
A “Snowball Effect” on Agriculture and Food Prices
Dr. Chad Hart, Professor of Resource Economics at Iowa State University, described the situation as a “snowball effect”:
“Many people have been trying to secure fertilizer since last fall. This spring, the demand is even higher. The shortage is compounding quickly.”
He added that as more nations oppose Russia’s actions in Ukraine, global commodity prices — including fertilizers, food, and fuel — have all been pushed upward.
“Seed prices are higher, food prices are higher, fuel is higher — everything is moving in that direction,” Hart said.
Even alternative soil-enrichment options such as manure and organic fertilizers are becoming more expensive.
According to Grow Intelligence, global fertilizer prices have risen by 13%–32% since Russia launched its military campaign on February 24.
Farmers Forced to Cut Inputs and Optimize Costs
Farmers across several countries are now testing soil nutrients daily before planting to reduce fertilizer use.
“They’re checking which nutrients remain and applying only minimal levels,” Hart explained. “They feel the input cost surge more directly than anyone.”
Since fall 2021, fertilizer costs have jumped by about 40%, according to Lance Britton, President of Sharp Lawn Care Fertilizer Group.
“We’re trying to offer the best products possible for our customers, but options are limited,” Britton said. “Businesses are doing everything they can to be more efficient and cut costs.”