Fertilizer prices have risen to a record high in North America, threatening to boost food inflation even higher. Nitrogen products are increasing due to the cost of natural gas, which is used in the manufacturing process.
The Green Markets North America Fertilizer Price Index soared to a record high last week of $996.32 per short ton.
The fertilizer market has been roiled by hurricanes, plant shutdowns, sanctions, and shortages of natural gas in Europe and China, pushing nutrient prices sky-high, which will raise the cost of production for global farmers. Here are global fertilizer prices zooming higher:
Fertilizers play an essential role in crop development for producing enough food for the global economy. The soaring costs of nutrients plus rapid food inflation will have the most severe economic impacts on emerging market economies first because low-income folks allocate a more significant part of their incomes to purchasing food. This week, the Food and Agriculture Organization's global food index hit a new decade high, driven by gains for cereals and vegetable oils.
Expensive fertilizer will push production costs higher for farmers worldwide, which will continue to increase food inflation.
Benefiting from rising fertilizer prices is CF Industries Holdings Inc., the world's second-biggest fertilizer company.
The Northern Hemisphere growing season begins late March/April. It may suggest that soaring farm input costs, such as fertilizer, diesel, labor, and machinery, will pressure farm incomes and lead to sustained food inflation well into 2022.