Itafos Inc V.IFOS

Repercussions of Price Increases on Fertilizer Markets

[kijiji]

Executive Summary

Global fertilizer prices are at near record levels and may remain elevated throughout 2022 and beyond. Fertilizer prices account for nearly one-fifth of U.S. farm cash costs, with an even greater share for corn and wheat producers. Fertilizer accounts for 36 percent of a farmer's operating costs for corn, and 35 percent for wheat. These elevated prices could have implications for crop production in 2022 and 2023.The Russian invasion of Ukraine has exacerbated the already limited fertilizer supply situation and has triggered import-export restrictions that will compound shortage concerns.

 

The United States is a significant producer of nitrogen and phosphorus yet imports large quantities of potassium-based fertilizers. Although fertilizer prices began increasing in 2021, many U.S. producers were able to avoid the later surge in fertilizer prices caused by Russia’s invasion of Ukraine, because fertilizers for 2022 plantings were purchased in 2021. However, as the Russia-Ukraine war continues, the impact of fertilizer prices could likely take a heavier toll on 2023 agricultural production decisions, domestically and abroad.

 

This report examines the global fertilizer landscape, with a focus on the three main macro-fertilizer groups—nitrogen, phosphorus, and potassium (NPK). We look at (1) the major suppliers; (2) the major users; (3) the major exporters and importers; (4) the impact of the Russian invasion of Ukraine; and (5) discuss how the United States fares relative to other countries.

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