Farm Management Specialist Gary Schnitkey from the University of Illinois (UoI) warns that major fertilizers in Illinois, a "rust belt" farming state, have already increased by about 50 percent in 2021. The situation is only expected to worsen into 2022.
"Higher commodity prices, labor shortages, the COVID situation and overall strong demand for corn and soybeans right now are leading to where we are at currently," Schnitkey says about what he thinks the causes of all this are.
While Schnitkey personally does not expect fertilizer prices to reach the same sky-high levels as in 2008 – though they could, just to be clear – the writing is on the wall for even more inflation and shortages.
"$746 per ton for anhydrous ammonia, up 53% from last year," he says. "DAP is $717 per ton, which is a $327 increase and potash is at $600 per ton."
Farmers, Schnitkey says, should factor these higher fertilizer prices into their 2022 corn and soybean budgets as skyrocketing costs could impact which crops they end up deciding to plant next season.
Fertilizer prices are also skyrocketing in Europe, which is already leading to shortages all across the market.
Since one of the byproducts of fertilizer production is carbon dioxide (CO2), which is used to carbonate drinks and transport perishable items like meat, without CO2, the food supply chain will collapse.
"It's an important chemical used to stun chickens and pigs before slaughter, as well as packaging to extend shelf life and dry ice that keeps perishable items frozen during delivery," Zero Hedge reported.
"Without it, food supply chains break."
The government's Wuhan coronavirus (Covid-19) lockdowns are largely to blame for this global supply chain disruption, as are the fiat currency Ponzi schemes (i.e., the Federal Reserve) that continue to artificially pump up the money supply, creating massive inflation and eventually hyperinflation.
If we did not have absolute psychopaths running everything, in other words, none of this would be a reality. But because of widespread complacency and blind trust in corrupt politicians of every political stripe, this country and much of the rest of the world is headed straight down into the abyss.
"The only reason prices are going up is due to commodity price," wrote one commenter at Brownfield Ag News.
"The fertilizer companies are taking advantage of this and trying to keep the money out of the hands of the farmers, they just want a piece of the pie. They are no different than equipment dealers as the price of new and used equipment has sky rocketed. Prices can rise quickly but are very slow to retreat. What if commodity prices go down, will the price of inputs go down, I doubt if they will. There are no supply problems."
Another wrote that farmers have other options and do not need to pay sky-high prices. It is just a matter of shopping around and employing other growing methods, apparently.
According to Bloomberg writer Elizabeth Elkin, "extreme weather" is also to blame for fertilizer shortages, along with "plant shutdowns, sanctions, and rising energy costs," though this does not explain why energy costs are rising.
"It's almost like a perfect storm of different reasons that probably has a lot of upside in price for different macronutrients," says Samuel Taylor, an executive director of research at Rabobank in Cleveland.
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Sources for this article include: