Rise in fertilizer and wheat costs expected to impact food prices worldwide in part due to Russia’s invasion of Ukraine
As the air raid sirens blare and Russia continues its invasion of Ukraine, the ripple effect of Russian President Vladimir Putin’s decision to invade a sovereign country is starting to be felt worldwide. The cost of fuel is skyrocketing, but the cost of fertilizer has the potential to affect food prices worldwide.
Russia produces 25 percent of the European supply of key fertilizer ingredients nitrogen, potash, and phosphate. Fertilizer is desperately needed worldwide to ensure robust crop production, and any disruption to these exports could significantly damage food production worldwide.
On Friday, the Russian minister of trade and industry recommended that the country’s fertilizer producers halt exports, citing uncertainty as to whether these exports would reach foreign markets.
Even before the invasion, fertilizer prices had risen starkly, largely due to rising gas prices necessary to ship fertilizers across countries and continents.
In January, Texas farmers were experiencing higher costs, and they were preparing for prices to continue their upward climb. At the time, prices were up as much as 200% year-over-year.
In a report prepared at the request of Louisiana Rep. Julia Letlow, Outlaw, and other agricultural economists, they noted product shortages and growing input costs would create a challenging environment for which the farm safety net is ill-prepared.
“Coupled with current COVID supply chain issues, this will further stress the production environment for agriculture across the country,” he said. “The current farm safety net is not designed to address these types of rapid production cost increases, which will continue to be a growing concern for farmers across the country, creating an emerging need for assistance.”
In New Orleans, the popular nitrogen fertilizer urea rose by 29 percent to $705 per short ton, setting a record for single-day price inflation in the 45-year history of the gauge. At the market opening on Monday, prices had further soared to $850 per short ton, and the trend shows little sign of abating as Russian fertilizer exports continue to be sorely missed from global markets.
The urgency of addressing the likely fertilizer scarcity has prompted some experts to envision creative—and, for many, unappetizing—replacements.
The Epoch Times reports that In recent years, three states have passed legislation to legalize natural organic reduction, better known as “human composting,” a novel and controversial means of disposing of human cadavers by dissolving them in water to be used as fertilizer.
They go on to note that “human composting is still far from becoming a significant factor in the fertilizer industry, and such processes are remote from the immediate ramifications of the Russian invasion. However, if fertilizer prices remain geopolitically fraught as a result of protracted conflict in Eastern Europe, it is only natural that alternative sources of fertilizer may become more attractive.”
Coupled with the costs of fertilizer, wheat prices shot to a 14-year high last week, fueled by the conflict between Russia and Ukraine. The two countries account for nearly 30% of the world’s wheat exports.
“That’s nothing compared to when your family budget goes up $1,000 a month on groceries,” said Ben Riensche with the Blue Diamond Farming Company.
“This is going to hit the world breadbasket, possibly harder than the U.S. breadbasket,” Riensche said.
Riensche is a sixth-generation farmer overseeing 16,000 acres in Iowa who spoke with WCTI12 and spoke about his rising costs. He claims that it’s now costing him $240 an acre to feed his crops with nitrogen, triple what he paid in the past.
“We’re either going to have to spread it really thin and that means a smaller harvest, empty shelves, increased prices at the grocery store,” Riensche said.
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