Most people don’t give fertilizer a second thought — except maybe when driving through a particularly fragrant agricultural area. But with prices for some synthetic nutrients at their highest levels since the financial crisis, it could mean weaker harvests and bigger grocery bills next year, just as the world’s supply chains start to recover from the pandemic, Bloomberg reported. A perfect storm of events has hit the chemical fertilizer market this year, slamming farmers already buckling under the strain of rising costs to produce food. Prices for urea, a popular nitrogen-based fertilizer, skyrocketed earlier this month to the highest since 2012 in New Orleans, the U.S.’s major fertilizer trading hub. A common phosphate fertilizer known as DAP is the most expensive in that market since 2008. Some are holding out before buying for the next growing season in hopes costs come down — a risk since prices could continue to rise. Farmers growing the commodity-grade corn, soy and other grains that fuel both livestock and packaged-food factories are already spending more than normal on seeds, labor, transportation and equipment. That’s helped contribute to sharp food inflation over the past year. A United Nations measure of global food prices is near the highest in a decade, a problem the fertilizer spike could exacerbate. A confluence of events are behind the rising prices. Back-to-back late summer storms on the U.S. Gulf Coast prevented product from moving in and out and temporarily shuttered plants in the region, including the largest nitrogen complex in the world, owned by CF Industries Holdings Inc. The company was then forced to shut two U.K. plants due to Europe’s record rally in natural gas, the primary feedstock for much of the nitrogen produced globally.
