(Bloomberg) — 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.
A perfect storm of events — from extreme weather and plant shutdowns to new government sanctions — have 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, Bloomberg data show.
“As fertilizer prices continue to rise, farmers will either cut application rates, cut fertilizer entirely in hopes for lower future pricing, or cut other farm products to account for the bigger expected spend,” said Alexis Maxwell, an analyst at Green Markets, a business owned by Bloomberg.
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