Fertilizer Inflation Likely to Persist into Spring Planting
- Growers and retail input suppliers face one of the worst inflationary environments in decades, driven by a continued parabolic rise in fertilizer prices. Nitrogen production shocks, tight global supplies, rising natural gas input costs, and steady demand are pushing up prices.
- While the situation will eventually correct itself, our analysis suggests that high fertilizer costs will persist into the spring 2022 planting season at minimum. We base this conclusion in part on a recent farmer survey and university study, both of which place the odds of high prices persisting at 70% or above.
- Farm supply cooperatives appear to be better managing risk today compared to 2008-09, when a sudden drop in fertilizer prices forced some cooperatives to write down fertilizer inventory. In an environment of volatile crop and natural gas prices, the key, of course, is for retailers to match selling prices to the farmer with rising wholesale costs.
Stay ahead of the game in your field. Subscribe today.
Get CoBank's industry-leading Knowledge Exchange research reports delivered straight to your inbox as soon as they're released.
Have a comment or question about these reports?
Contact CoBank's Knowledge Exchange team to ask questions, engage with analysts or receive additional information.