Fertilizer prices have soared in recent weeks as Russia’s invasion of Ukraine further exacerbated global supply chain disruptions.
Why it matters: Fertilizer is a key component in food production, meaning farmers are poised to face higher costs likely leading to further increases in food prices.
- Fertilizer is about three to four times more expensive than it was in 2020, the Wall Street Journal reported Thursday.
Threat level: Fertilizer accounts for 11% of the variable cash costs for U.S. farmers, according to a Wells Fargo Investment Institute report provided to Axios.
- Russia and its ally Belarus collectively deliver 9% to 32% of the world’s main fertilizer groups (nitrogen, phosphorus and potassium).
- Russia suspended fertilizer exports earlier this month.
The bottom line: The crisis appears likely to exacerbate inflation.