Fertilizer Index Hits Record, Threatening Higher Food Prices
(Bloomberg) -- A gauge of North American fertilizer prices soared to a record high, driving up costs for farmers and threatening to worsen food inflation.
The Green Markets North America Fertilizer Price Index rose 7.9% to $996.32 per short ton, soaring past its 2008 peak to set a new benchmark for the index that began in January 2002.
The energy squeeze in Europe and Asia has created a critical situation for the fertilizer industry, according to the biggest manufacturer in Hungary. Companies such as CF Industries Holdings Inc. and Yara International ASA have had to shut plants or reduce production as prices for natural gas, the main feedstock for most nitrogen fertilizer, have surged. In India, the government has directed producers to refrain from raising prices.
In Canada, the world’s largest canola exporter and a major wheat producer, farmers faced the biggest fertilizer price hike since 2015 in this year’s second quarter, according to Statistics Canada. Total farm input costs, which include machinery, seeds and feed expenses, rose in that period to the highest since at least 2002 on the government agency’s Farm Input Price Index.
The price spike of the crop nutrients deemed vital for producing enough food to supply a growing global population is stoking concerns of more inflation when many people still struggle to feed their families due to job losses and other lingering economic impacts from the pandemic. Expensive fertilizer could push U.S. corn farmers’ cost of production 16% higher, according to Bloomberg’s Green Markets.
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