Prepare for Higher Fertilizer Prices

[Ray]

I've been putting some of my former procurement manager skills to work.

Wholesale fertilizer prices had a moderate jump (12-14%) at the end of last year. Those increases were primarily the result of three factors:

• Increased energy costs (especially natural gas pricing) for the manufacture of nitrogen and nitrogen fertilizers.
• Shipping costs - it used to cost $2000 to $2500 to ship a container from Europe to North America, now it is $10,000 to $15,000, or even more.
• China stopped exporting all Ag fertilizer salts last fall (as an example, China exports 40% of the urea worldwide), just at the time when Northern Hemisphere farmers start acquiring fertilizer salts for the spring planting.

In January, most producers felt that there would be upwards pressure on fertilizer salt pricing until the end of the first quarter, and then prices would stabilize because of reduced demand.

However, notice that there has been no mention about the war and subsequent boycott in this, so far. That throws three more factors into the equation:

• If the war continues to cause energy prices to go up, then fertilizer prices will continue to go up with them.
• Russia and the Ukraine are large exporters of nitrogen fertilizer (urea, ammonium nitrate, etc.). The loss of those exports will cause all nitrogen fertilizers to increase in price.
• Finally, Russia and Belarus are the #2 and #3 exporter of potassium chloride, which is needed for potassium nitrate and monopotassium phosphate (MKP) production. Hopefully, there will not be a shortage of KNO3 and MKP at this time, as both Israel (Haifa) and Chile (SQM) are also exporters of KCl), but we can expect the price will still go up.

[DirtyCoconuts]

so time to invest in mineral futures?

[camille1585]

There is absolutely no end in sight to the spiraling price increases, and I didn't realize that even fertilizers were affected.

Sky high gas prices are just the tip of the iceberg unfortunately. It was really painful to pay 2.30€/L last time I filled the car (to put it in US metrics, that's over $10/gal) and it doesn't seem like it will get better any time soon.

[Roberta]

We can be glad that orchids don't need much fertilizer! I suspect that we'll all spend a lot more to fuel our cars than to feed our orchids.

[Leafmite]

I think I am good for a while...I have Hollytone for the camellia, strawberries and blueberries, a large box of citrus fertilizer for the citrus and rainforest plants, Ironite for the cinnamon tree, liquid fertilizer for the hydroponics, air plant fertilizer for the airplants, Osmocote, a general fertilizer, and an organic fertilizer for everything else.... I'm good.

[Ray]

Originally Posted by camille1585

It was really painful to pay 2.30€/L last time I filled the car (to put it in US metrics, that's over $10/gal) and it doesn't seem like it will get better any time soon.

Here, we bitch and moan when gasoline reaches $4/gal (~0.95€/L).

[Dimples]

Prices are around $6/gal in my area. I can't believe people are still driving 80+ mph on the freeway.

For those of you with outdoor in-ground plants, urine diluted 1:10 +/- makes a great fertilizer. Avoid salty foods the night before and the day of. It's free, water-soluble, plant-available, you know exactly what's in it, and it's locally sourced. Plants love it.

Before you say yuck, there are urine diversion programs around the world where farmers contract to collect urine from their community (often from an apartment complex or large building with special plumbing) and use it to grow food. Nutrients are nutrients!

[Roberta]

For fertilizer, I bought a 25 pound (11 kg) bag of MSU Cal-Mag fertilizer from SVO 3 or 4 years ago (when I put in my RO system). I keep it in a sealed bucket, it stays nice and dry. At the rate that I'm using it, will probably last most of the rest of my life. Similar to my pesticide stash... will also probably last longer than me.

[SG in CR]

Originally Posted by Ray

In January, most producers felt that there would be upwards pressure on fertilizer salt pricing until the end of the first quarter, and then prices would stabilize because of reduced demand.

However, notice that there has been no mention about the war and subsequent boycott in this, so far. That throws three more factors into the equation:

• If the war continues to cause energy prices to go up, then fertilizer prices will continue to go up with them.
• Russia and the Ukraine are large exporters of nitrogen fertilizer (urea, ammonium nitrate, etc.). The loss of those exports will cause all nitrogen fertilizers to increase in price.
• Finally, Russia and Belarus are the #2 and #3 exporter of potassium chloride, which is needed for potassium nitrate and monopotassium phosphate (MKP) production. Hopefully, there will not be a shortage of KNO3 and MKP at this time, as both Israel (Haifa) and Chile (SQM) are also exporters of KCl), but we can expect the price will still go up.

I grow oranges and the fertilizer prices have been killing me, they're up about 280% from 2020 here in Costa Rica. I only bought about 40% of the fertilizer I would have normally in 2021 expecting that by June 2022 things would come back down to normal-ish prices. I can get away with it for a single year. But this year I need to buy a normal amount again, regardless of price. Despite an increase in the price of everything I buy, orange prices are still nearly the same as last year. If the fertilizer prices don't drop back down or the orange price doesn't hike up at least 50% I'll be losing money next year.
Farmers are having a rough time of it pretty much everywhere. We've been taking the hit because food prices so far haven't risen much. But if fert prices don't drop soon you can expect a big spike in the cost of food this year.

[Dimples]

Originally Posted by SG in CR

Farmers are having a rough time of it pretty much everywhere. We've been taking the hit because food prices so far haven't risen much. But if fert prices don't drop soon you can expect a big spike in the cost of food this year.

Farmers take the hit when input prices go up.
Middlemen reap the rewards when food prices go up.
Farmers also take all of the BLAME when food prices go up.
I'm sending you well wishes for your harvest this year.

I wish the general public understood that farmers aren't to blame for the cost of food. In the US many farmers are barely making a living because consumers demand cheap food and the middlemen demand to make a profit. I'm sure it's the same elsewhere in the world too.

The situation that started last year in the US beef industry is sickening. Processing plants shut down in 2020 just like the rest of the world did. That resulted in cattle ranchers unable to sell and having too many head this year, and feed prices went up along with everything else. Ranchers were driving from Texas to states bordering Canada to FIND hay for sale.

Supply was high, so prices per head are rock bottom.
Processing capacity is still lower than pre-2020, so beef is in limited supply nationwide, and prices are up quite a bit. Farmers are going bankrupt and middlemen are raking in enormous profits. Our food system is broken, farmers are leaving the profession, we're at a crisis point globally. Buy local if you can afford it. Ugh.