Report Analyzes Record-High Fertilizer Prices

carrot field with sprayer
Fertilizer prices have reached record highs and a new report by the Agricultural and Food Policy Center at Texas A&M University indicates they may go much higher in 2022.
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Texas A&M Agricultural and Food Policy Center projects 80% increase in 2022

By Blair Fannin

Farmers and economists are wringing their hands on how to get a handle on record-high fertilizer prices heading into the 2022 crop year, and a new report compiled by the Agricultural and Food Policy Center at Texas A&M University suggests prices may not be done going up due to several factors.

Joe Outlaw, Ph.D., co-director of the Agricultural and Food Policy Center and Texas A&M AgriLife Extension Service economist, told farmers at the Blackland Income Growth Conference in Waco that fertilizer prices could escalate as much as 80% this year as supply and demand gyrate at never-before-seen levels.

A recently completed AFPC report, which analyzed the economic impacts of higher fertilizer prices on 64 representative farms, was compiled from a study initially requested by U.S. Rep. Julia Letlow, R-La. Outlaw said producers are not only experiencing sticker shock, but may see product shortages.

“Coupled with current COVID supply chain issues, this will further stress the production environment for agriculture across the country,” Outlaw said.

The fertilizer report is the most recent in a series of analyses by AFPC, which has previously released impact reports on supply disruptions to the U.S. cattle market and proposed estate tax legislation

Rocketing fertilizer prices

The AFPC report found that as the nation continues to maneuver through supply chain disruptions and agricultural input availability, there are impacts on both fertilizer availability and costs. Last August, the Food and Agricultural Policy Research Institute in Missouri projected only a 10% increase in fertilizer prices in its forecast model, but recent spot prices have forecasts reaching as high as 80% more for the 2022 planting season.

Anhydrous ammonia increased by as much as $688 per ton or $86,000 per 1,000-acre AFPC representative farm through October 2021. The AFPC representative farms are from across the country and are used to calculate and project potential implications on future production.

SOURCE: AGRILIFE TODAY