Fertilizer prices soar, posing risk of further food price increases
Fertilizer prices have soared in recent weeks as Russia’s invasion of Ukraine further exacerbated global supply chain disruptions.
Why it matters: Fertilizer is a key component in food production, meaning farmers are poised to face higher costs likely leading to further increases in food prices.
- Fertilizer is about three to four times more expensive than it was in 2020, the Wall Street Journal reported Thursday.
Threat level: Fertilizer accounts for 11% of the variable cash costs for U.S. farmers, according to a Wells Fargo Investment Institute report provided to Axios.
- Russia and its ally Belarus collectively deliver 9% to 32% of the world's main fertilizer groups (nitrogen, phosphorus and potassium).
- Russia suspended fertilizer exports earlier this month.
The bottom line: The crisis appears likely to exacerbate inflation.