Increased fertilizer costs affecting farmers, consumers down the line

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AMARILLO, Texas (KAMR/KCIT) — Higher fertilizer costs are affecting farmers across the world, including here on the High Plains. As a result, consumers will likely see higher food costs in the future.

“Depending on the type of fertilizer you’re looking at prices are up year over year, anywhere from 75 to 90%. Nitrogen, in particular, is the one that’s jumped a little over 90% in one year,” said Justin Benavidez, an assistant professor at Texas A&M AgriLife.

He said crop prices have improved but each unit of fertilizer decreases net revenue for farmers. According to Benavidez, typically fertilizer accounts for 8-15% of growing costs, but it is not the most expensive part.

“This year, it very likely is going to make up a larger percentage of the cost and so if you think, you know, corn prices jumped 50%, cotton prices jumped closer to 75%,” said Benavidez. “Both are good numbers and corn price and cotton price are both high compared to last year but the cost of fertilizer inputs have outpaced the corn and cotton increase.”

He encourages farmers to do more soil testing to see how much fertilizer is needed.

“We don’t want to put on extra nitrogen where we don’t need it since it’s so expensive,” said Benavidez. “So, all of those things combined mean that we’re probably going to see a little bit lower yields if people are putting less fertilizer on or using a lower seeding rate, simply because you know, that is something that helps crop production.”

Benavidez also said consumers will likely see higher food costs as a result.

“These prices aren’t impacting the price of food you’ll see now because we’re already in the middle of harvest. But the price you’ll see a year from now or a year and a half from now could be higher because of higher fertilizer prices,” he continued.

Benavidez attributed higher fertilizer costs to the rising cost of production, in part due to higher natural gas costs and shipping issues.

“We’ve just got a really unique, perfect storm of natural gas being high. Natural gas is used to power irrigation here in the High Plains and then that, in turn, is also impacting the price of nitrogen fertilizer,” he continued. “We have these unrelated but same impact, trade disputes that are leading to higher phosphate prices at the same time. So, unfortunately, it’s a perfect storm for input costs.”

He said lower production yields could affect people down the chain in agriculture production.

“If we fertilize less, or if we target our fertilizer application, or if we target our irrigation application and see lower yields—that could mean, you know, maintained profits for farmers if it’s managed well. But if we have less cotton, we’re gonna have less demand for ginning hours at the cotton gin will have less demand for space at the grain elevator.”

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