This article on the Center for Agricultural Profitability updates previous articles on ever-changing world fertilizer markets and associated energy markets (Beghin and Nogueira, 2021; Beghin, 2022). This update reports historically high prices that appear to be declining from their peak, earlier in 2022. However, the situation is still dire in Europe. The report also provides a more in-depth discussion of the impact of fertilizer prices on affordability accounting for technical progress in farm technology to economize on fertilizer use in the last half-century. This progress has helped mitigate the impact of fertilizer price hikes.

Recall the volatile context of high fertilizer demand, droughts affecting fertilizer supply, high-fossil energy prices, supply chain disruptions, trade policies, and the Ukraine-Russia war, which led to elevated fertilizer nominal prices to levels not seen since 2008. As in the previous articles, industry experts discuss recent developments in natural gas prices and their implications in fertilizer prices, fertilizer affordability relative to crop prices, and then qualify the trend in lower affordability by looking at productivity gains and fertilizer-saving technology in crop production in the last 50 years using productivity data from USDA.

Read the full article