CHICAGO: A global shortage of nitrogen fertilizer is driving prices to record levels, prompting North America’s farmers to delay purchases and raising the risk of a spring scramble to apply the crop nutrient before planting season. Farmers apply nitrogen to boost yields of corn, canola and wheat. The Texas Arctic Blast in February and Hurricane Ida in August disrupted US fertilizer production. Then, prices of natural gas, a key input in producing nitrogen, soared in Europe due to high demand and low supplies. Global urea prices this month topped $1,000 per tonne for the first time, according to BMO Capital Markets.
In the United States, nitrogen fertilizer supplies are adequate for applications before winter, said Daren Coppock, CEO at US-based Agricultural Retailers Association. Applying fertilizer before winter reduces farmers’ spring workload.
But with prices so high, some farmers are delaying purchases, risking a scramble for supplies during their busiest time of year, Coppock said.
Global fertilizer sales were worth $53 billion in 2020, and prices are at least 80% higher so far this year, according to Argus Media. Normally, MKC, a Kansas farm cooperative, sells fertilizer to farmers for payment up front with delivery months down the road, giving growers certainty about a key expense. With prices soaring, MKC has scaled back its pre-paid sales out of caution.
“You just don’t know what the price is going to be. It has put a lot of retailers in a tough spot,” said Troy Walker, MKC’s director of retail fertilizer.
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