Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Tribune News Service
Tribune News Service
Business
Christopher Vondracek

Price of fertilizer on the steep rise — farmers unsure who, what's to blame

Dion Letcher's family has run a fertilizer business in Garden City, Minnesota, on the flat plains south of Mankato since the Eisenhower administration. Letcher is still not sure how to explain the accelerated costs of the chemical nutrients farmers use to feed corn and soybeans.

"Fertilizer is probably not going down for a year or more," Letcher said on Tuesday, noting producers in China, Venezuela and Russia. "Because a lot of fertilizer comes from kind of dictator-y countries that kind of don't like us too much."

For the last two years, the cost of retail fertilizer has shot up. At April's end, agriculture journalists with DTN tracked the price at $1,090 a ton, highest since 2008.

Many farmers rely on the "big 3" — nitrogen, phosphorous and potassium — to boost crop production. While many growers already applied fertilizer to fields last fall for this year's growing cycle, they're worried about the rising costs for this coming autumn.

"I know we're awful thankful we have manure from our cattle," said Eunice Biel, who farms with her husband outside Harmony, Minn. "Although that isn't enough."

Biel, who farms 450 acres of corn, bought fertilizer last fall for $80,000 from her local elevator — double the $40,000 she spent a year earlier. "It's just like the gas prices," said Biel. "The corporations can do it [raise the price], so they do it."

Mike Peterson grows corn, soybeans and a little wheat on his farm off Highway 19 near Carleton College outside Northfield, Minnesota. He too suspects fertilizer companies are taking advantage of the situation.

"If you can imagine the mining industry that it takes," said Peterson. "They're not bagging this stuff by hand. There's not a lot of labor per ton in.

"They're charging two times what's logical for the product."

Often carried in local cooperatives or at dealers, fertilizer is mined around the world, but the world's largest producer is China, followed by the U.S. and Russia. Canada is also a leading exporter.

Locally, much of the fertilizer used on the eastern half of the state is brought up the Mississippi River on barges to be sold and applied by local dealers. The vendors say they're just the middlemen.

"We have everything in the shed for the spring," said Ralph Price, agronomy manager at Meadowlands Farmers Coop in Lamberton, Minnesota. "But everybody's worried about the future. They're set for a very, very good 2022. But 2023 doesn't look good."

Industry officials say the costs are rooted in a "perfect storm" of Russian President Vladimir Putin's war in eastern Europe, supply-side logjams and inflation. There are also nuances — some suggest countries, such as Morocco, have been dumping fertilizer in U.S. markets. China also suspended some fertilizer exports last fall.

"You're seeing less supply," said Patrick Murray, executive director of the Minnesota Crop Production Retailers, noting many sellers are locally-owned farmers' cooperatives. "The last thing they would want to do is raise prices on themselves."

Whatever is to blame: Fertilizer producers are seeing higher profits.

On Monday, Tampa, Florida-based Mosaic — one of the world's biggest producers — noted a 71% boost in profits during the first months of 2022 compared to a year ago. Canadian fertilizer giant Nutrien reported a "10-fold" increase in profits over the same quarter.

A spokesperson for Mosaic said there is not enough supply to meet the world's demand.

"We are pulling every lever available to increase our production to help alleviate the problem," said Mosaic's William Barksdale, in an e-mail.

While some suggest farmers may skimp on fertilizer, farmers who spoke with the Star Tribune said they will absorb the costs because they can't afford to skip a year in enriching their soil.

There's also the simple problem that an alternative supply isn't readily available.

"You're not going to snap your fingers and say, 'We need twice as much livestock,' so you can have twice as much poop," said Brad Carlson, an educator with University of Minnesota Extension.

One wrinkle that may help is last year's drought, which can increase nitrate levels in the soil, meaning farmers' chemical prescriptions could be less than usual.

A new state regulation prohibits application during the autumn season in vulnerable watersheds. In January, the Minnesota Department of Agriculture released a new map, showing which parts of the state now prohibit nitrogen fertilizer in the fall.

For the fertilizer dealer in Garden City, the new rules, global economic challenges and inflation all increase the cost of growing crops.

"That's the main thing," Letcher said. "Where it's $100 an acre. This year, it's like $200 an acre."

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.