“It’s harvest time in this little town, Time to bring it on in, pay the loans down…”
Luke Bryan’s lyrics ring true this time of year, especially as farmers bring in one of their most expensive harvests.
We don’t need to remind everyone (okay, we will anyway), but inflation this year, along with the war in Ukraine and global weather events, have raised input prices on everything from fuel to fertilizer.
And while farmers harvest this year’s costly crop, more than 50% are already worrying about how expensive fertilizer will be next year.
Fertilizer fiasco: We won’t rehash all the details, but the Russian invasion of Ukraine in February exhausted tight conditions for the global fertilizer supply, causing prices to hit record levels in March.
Fertilizer, one of farmers’ most expensive inputs, relies heavily on natural gas for its production.
ICYMI: Natural gas has proven extremely volatile, so we can count on fertilizer prices to stay high for a while.
And there was a hurricane: Ian caused “modest damage” to Mosaic phosphate fertilizer facilities in Florida. They’ll have the damage repaired within two weeks, but production could be reduced by 250K metric tons in upcoming months.
Mosaic produces nearly half of the phosphate fertilizer in the U.S.
The good news? DTN reported for the fourth consecutive week that no fertilizers experienced dramatic pricing swings. Five of the eight major fertilizers were slightly lower. Three fertilizers were slightly more expensive (urea, anhydrous, and UAN).
Data from September 2021 vs. September 2022 shows a price increase of $72/acre for fertilizer costs for corn and an increase of $25/ton for soybeans.
Fertilizer frugality: It’s a no-brainer, but farmers can limit/eliminate applications by soil testing and only applying where needed.
Soundbite: “Phosphorus and potassium applications can be reduced or eliminated if soil test levels are sufficiently high,” a report from the University of Illinois and the Ohio State University said. “Significant uncertainty exists concerning fertilizer prices moving into the spring.”