Fertilizer basics

The concept of soil fertilization likely extends back 8,000 years, when early farmers added manure and bones to their crops. Chemical versions weren’t invented until the 19th century, and their widespread use didn’t come about until the second half of the 20th century. Nowadays, fertilizers are an essential part of farming, and there are plenty of options: synthetic or organic (think: manure or seaweed), liquid or dry options, and a wide variety of formulations. 

All plants need fertilization. After sitting in the same soil week after week, they eventually eat up all of the nutrients, which then need to be replenished. Which fertilizer they need, however, requires some sleuthing. 

Most fertilizers are composed of three major nutrients: nitrogen, which stimulates the growth of healthy leaves; phosphorus, which encourages root and flower production; and potassium, which supports general health and disease resistance. (You’ll see these noted on bags of fertilizer as an NPK ratio.) Some fertilizers will also include micronutrients such as iron, copper, zinc, and magnesium. The best way to determine which nutrients your soil is lacking is via a soil test.

For home gardeners: Fertilizers can also be formulated for specific types of plants. There are versions for annuals, vegetables, turf grass, tropical houseplants, etc. Choose—or blend—the one(s) that best fit your greenery.

Fertilizers in agriculture

Of course, fertilizers are especially important when it comes to agriculture, and are responsible for boosting crop yields. Fertilizer application is believed to have been responsible for at least 50 percent increase in crop yield in the 20th century, according to an article published in Agriculture in 2022. Higher crop yields mean that less land is required for agriculture, which can benefit wildlife habitats and forests.

But fertilizer is a delicate addition to farming practices. Use too little and the crops lack critical nutrients. Apply too much, and you can offset the pH of the soil, thwart plant growth, increase pest attacks and cause topsoil erosion, among other issues. 

The use of chemical or synthetic fertilizers can also have serious environmental consequences. Their high concentrations of nitrogen and phosphorus can leach into and contaminate groundwater, cause algae blooms that harm aquatic ecosystems and remove healthy bacteria from the soil. One major example: the Gulf of Mexico Dead Zone, where overwhelming amounts of nutrients such as nitrogen and phosphorus have killed off marine life.   

Animals that eat fertilizer-treated plants can get sick, and some research shows that synthetic fertilizers are causing decreased fetal weight, neurological damage, diabetes, and cancer in humans. 

Globally, only about 35 percent of the nitrogen applied to plants is actually absorbed by them, leaving the rest to run off into the environment. Precision farming can help growers use fertilizers more efficiently so they get more of the benefits and less negative side effects.

It pays to be stringent about fertilizer use, not just for the health of the planet, but for the health of your wallet. Drastic jumps in fertilizer costs are hurting farmers’ bottom lines. The USDA forecasted that input costs for the 2024 growing season are expected to hit the third-highest level in history. Though fertilizer costs are expected to drop from their all-time high, the category remains a significant expense; for example, fertilizer accounts the largest single operating cost when growing corn. In short: Being smart about where fertilizer is applied, and how much, can have a major impact on budgets. 

Using fertilizer 

Adding fertilizer when a plant is in its dormant cycle can mess up its natural cycles. You’ll get the most out of fertilization at the start of spring when plants are generally in their active growth period. Depending on the plant, additional applications (every couple of weeks or so) may follow until fall; some indoor greenery also benefits from sporadic applications throughout the winter. 

As we’ve mentioned, just be cautious about how much you use—too much can have a contradictory effect, damaging the plants and the environment. 

Thankfully, there are safer alternatives available. 

Organic fertilizers are considered healthier for the environment and for us because they are made from living organisms (like fish emulsion). Two challenges that come with these options: They can be pricier, and they’re slow-release, meaning it’ll take days or weeks for the effects to become evident. 

Outside of the home, additional organic materials—like grass clippings, cover crops, or compost—can also help support soil health, suppress weed growth, and reduce soil erosion.

What do you want to know about fertilizer? Ask a question in the comments section below.

The post The Dirt on Fertilizer appeared first on Modern Farmer.

“Back when we were young buckaroos, we would plow and disc and get a crop of weeds to come up [and then] knock them down,” Glenn said.

Frank and his younger brother John would hop on the tractor and start pulling their blue plow through the fields in February and March. Then they would go back with a tiller and turn over the topsoil before planting corn, soybeans, wheat and oats.

Today, the Glenns are still running their family farm in Columbia, Missouri, growing corn, soybeans and hay. But about 25 years ago they transitioned to a majority no-till operation, no longer digging up the first few inches of soil before planting. Their fields are now filled with big clumps of dirt and old roots from previous harvests. 

Matthew Backer spreads anhydrous ammonia onto a field on April 4 at Wise Bros Inc. in Kingdom City, Mo. (Photo: Kate Cassady/Columbia Missourian)

No-till farming helps decrease erosion and runoff. It’s one of several regenerative farming methods that help farmers’ fertilizer stay in fields and not run off into nearby waterways.

Rob Myers, director of the University of Missouri Center for Regenerative Agriculture, said less than half of Missouri farmers are using a regenerative method such as cover crops, no-till or integrating crops and livestock. Cost is one of the factors holding farmers back, Myers said. 

Farmers use fertilizer to build their soil’s fertility and help increase crop yields. But less than half of the nitrogen fertilizer applied is taken up by the crops. These excess nutrients wash into the Gulf of Mexico, creating a dead zone where fish and shrimp cannot live. But nutrient pollution is not just an environmental problem—it’s a business one.

[RELATED: Fertilizer Companies Cash in While Farmers and Communities Struggle]

Farmers are responsible for the cost of implementing alternative practices, and they bear the risk if it doesn’t work. Bruce Shryock, a corn, soybean and wheat farmer in Auxvasse, said farmers are stuck between science and the economy. 

“If you spend more and then don’t make any more, then you’re in trouble,” Shryock said.

Farmer finances on the line

A report from the University of Missouri found that net farm income in the state is projected to decrease by 14 percent this year, while the U.S. Department of Agriculture anticipates national farm income to fall by a fifth. Meanwhile, farmers’ input costs have increased 55 percent since 2020. 

Fertilizer accounts for about a third of these annual costs, and it now costs farmers nearly 73 percent more than it did in 2020. But farmers continue to buy it because it offers a good return on investment, said Ray Massey, a professor in MU’s College of Agriculture, Food and Natural Resources. 

“The economics said that you can make more money if you have higher yields,” Massey said. 

Farmers also must factor in other input costs like seed, pesticide, equipment and fuel. Crop revenue has increased but the prices for inputs have continued to rise, so their margins have stayed about the same, Frank Glenn said. 

 “It seems like they (the ag industry) don’t want farmers to make any money,” he said.

Frank Glenn operates a tractor while planting corn on April 11, 2023 at Glendale Farm and Stables in Columbia, Mo. The multiple screens monitor the mechanics of the tractor and where the corn has been planted. (Photo: Maya Bell/Columbia Missourian)

Some farmers coped with the price increases by cutting back on the amount of fertilizer they apply. Glenn said he and his brother went from applying 180 pounds an acre to 120 pounds last year. He said they were lucky crop prices were high or they might have not been able to survive the fertilizer price hike. 

“Jesus, it makes you wanna puke,” his brother John Glenn said. “It’s so expensive.“

Promoting intentional fertilizer use

Because fertilizer is expensive, farmers want to get the most bang for their buck, said Andrea Rice, director of research, education, and outreach at the Missouri Fertilizer Control Board. 

The agency enforces Missouri fertilizer laws, conducts nutrient research and helps farms implement alternative farming methods. 

Rice said high costs and current profit margins discourage farmers from applying more than the recommended amount, noting that farmers lose money if the fertilizer washes off their fields. 

Heavy rain or snow melt washes fertilizer into waterways, polluting water and creating toxic algae blooms in lakes and rivers. Ultimately, some of this pollution travels downstream to the Gulf of Mexico and creates a hypoxic area called the dead zone at the mouth of the Mississippi River where water oxygen levels plummet. Any wildlife in these areas must move or suffocate.

“The Gulf hypoxia situation—that’s not something that any farmer would want to cause,” Rice said. But she said the problem did not appear overnight and is going to take time to solve. 

Farmers have several ways of measuring how much fertilizer they need to apply to their fields. This includes soil testing and looking at past harvests to compare their yield to the amount of fertilizer they applied. 

The Glenns use a satellite to create a grid of their fields and take samples from each block on the grid. They can see how their soil structure varies and pinpoint the exact nutrients each block needs. 

Miscalculations such as applying too much fertilizer, applying it on frozen ground or overwatering fields will increase the runoff potential. 

Sarah Carden, a senior policy advocate at Farm Action, an advocacy group opposing corporate influence in agriculture, said the industry is set up to support conventional farming, which disincentivizes alternative practices. 

It’s easier for conventional farmers to qualify for crop insurance, Carden said, but it gets harder when a farmer wants to decrease the amount of fertilizer they use.

“It becomes a lot riskier for a farmer to participate in alternative forms of production,” Carden said. 

Making change happen

One method farmers can adopt to minimize the harmful effects of fertilizer is to plant cover crops, which help decrease erosion, hold moisture in the ground and reduce weeds. 

Integrating cover crops was a learning experience for Shryock, the farmer from Auxvasse. In his first year planting cover crops, a wet spring spurred his rye to grow to about eight feet tall. Getting that tall rye out of the field was a challenge, as it wrapped around his planter shaft and damaged the bearings on his equipment.

“I cussed it that first year,” he said. 

Shryock has since learned to kill rye when it’s about two feet tall. He saw the benefits of cover crops after that first year as it helped his soil and decreased runoff. 

Shryock also no-tills in addition to cover crops. These practices take more time, he said, but they’ve been worth it. He cut back on the amount of fuel he uses, but he still has to buy seed and pesticide and must spend time planting the cover crop. Shryock thinks more people would plant them if there was an incentive to help cover their costs. 

Frank Glenn plants corn in a minimum-till field on April 11, 2023 at Glendale Farm and Stables in Columbia, Mo. (Photo: Maya Bell/Columbia Missourian)

Rice said education can help increase the adoption of cover crops, though some farmers are used to doing things the way they and their families always have. 

She first advises new clients to do soil sampling. Then, she discusses the type of fertilizer they are using, the amount, application times and if they are using cover crops. 

“If we take those things and we do a little bit at a time and we keep encouraging and keep educating over time, there will be a big impact,” Rice said.

The MU Center for Regenerative Agriculture has recently been awarded two grants: $25 million to offer financial incentives for farmers to implement regenerative practices and $10 million to research how to improve varieties of cover crops. 

The grant will pay farmers to adopt grid sampling, cover crops and livestock grazing systems to decrease nitrogen runoff. It also will fund programs to help farmers learn about these methods and their benefits.

“It takes time to keep making changes and improvements in agriculture,” Myers said. “But I think we’re headed in the right direction with these practices.” 

This story is part of The Price of Plenty, a special project investigating fertilizer from the University of Florida College of Journalism and Communications and the University of Missouri School of Journalism, supported by the Pulitzer Center’s nationwide Connected Coastlines reporting initiative and distributed by the Mississippi River Basin Ag & Water Desk.

The post Facing High Fertilizer Costs, Farmers Still Struggle to Use Less appeared first on Modern Farmer.

Last year, he didn’t plant any. 

Dasher, 56, said it was because of elevated fertilizer prices. Like many farmers, Dasher is finding it hard to stay afloat. “The American public just doesn’t understand what kind of beating our group (of farmers) has been taking over the years,” he said.

Although fertilizer prices have fallen from their all-time high in March 2022, when they spiked up to 3.5 times higher than two years before, the commodity is likely to remain costly for some time, continuing to squeeze the food production system.

Meanwhile, the fertilizer industry has yielded record profits. Canada-based Nutrien Ltd., the world’s leading producer of potash fertilizer, saw profits increase 1575 percent between 2020 and 2022, to $7.7 billion. Florida-based Mosaic Co., one of the largest US producers of potash and phosphate fertilizer, netted $3.6 billion in 2022, a 438 percent increase from 2020. CF Industries, an Illinois-based fertilizer company, made $3.2 billion in 2022, a 955 percent increase from 2020.

The eye-popping figures have heightened concerns about consolidation in the fertilizer industry, even as the Biden Administration moves to boost domestic fertilizer production.

When asked for comment, Mosaic said in an email that the fertilizer business is cyclical and thus has volatility in prices. CF Industries did not respond to requests for comment. Nutrien did not provide a statement by press time. 

Global disruptions help drive up prices

There are a few clear reasons for the recent record fertilizer prices. The onset of the COVID-19 pandemic in 2020 caused disruptions to the supply chain and labor shortages that hindered production of natural gas, a major ingredient in fertilizer. 

Then came a series of natural disasters, such as the February 2021 deep freeze in Texas, which froze natural gas wells and drove up demand for residential heating. In August that year, Hurricane Ida disturbed natural gas and fertilizer production in the Southeast.

Another factor was a reduction in exports from China, the world’s leading producer of phosphate, a chemical element that is a key component of fertilizer.

The war in Ukraine further tightened the market as Western countries sanctioned Russia, the world’s top fertilizer exporter. Disruptions in natural gas flow from Russia led to spikes in European natural gas prices and forced several European fertilizer plants to close or cut output.

Even low water levels on the Mississippi River contributed to price increases, as it limited the amount of fertilizer that could be shipped by barge.

“There were a myriad of reasons why we were seeing this big run up in fertilizer prices. It’s not just one thing. It was literally a whole menu of things that were seemingly going in the wrong direction if you were looking to obtain fertilizer,” said Chad Hart, an agricultural economist at Iowa State University.

Several of these factors are referenced in a study Hart co-authored that was hailed by The Fertilizer Institute for providing “the best analysis data will allow to date.” But some argue the study omits a large factor of the price increase: market power as a result of consolidation.

Allegations of market manipulation

Farm Action is a Missouri-based nonprofit organization that advocates for competitive food and agriculture systems across the United States. Co-founder Joe Maxwell believes consolidation in the fertilizer industry has led to market manipulation.

Since 1980, the number of fertilizer firms in the United States has fallen from 46 to 13. In 2019, just four corporations represented 75 percent of total domestic fertilizer production: CF Industries, Nutrien, Koch and Yara-USA, according to Farm Action. And just two companies supply 85 percent of the North American potash market: Nutrien and Mosaic, according to the Federal Trade Commission.

“These companies took advantage of their dominant position in a marketplace and increased commodity price to the farmers in an effort to price gouge and extract all the wealth that they could from that supply chain at the very roots: fertilizer,” Maxwell said.

[RELATED: Facing High Fertilizer Costs, Farmers Still Struggle to Use Less]

In 2021, the United States imposed tariffs on fertilizer imports from Morocco and Russia following petitions from Mosaic and CF Industries. Growers widely derided the move. A letter from the National Corn Growers Association to Mosaic accused the company of “irresponsible” practices that “manipulate the supply curve” and “dictate price to farmers.” 

Later that year, Farm Action wrote a letter to the Antitrust Division of the Department of Justice accusing the fertilizer industry of using its “monopoly power” to fix prices, requesting an investigation. Iowa Republican Sen. Chuck Grassley seconded that call, but no investigation has yet been announced. 

Mosaic said in an emailed response that since the tariffs took effect, foreign producers importing fertilizer into the North American market has increased, and by extension, made the market more competitive.

In a company Q&A, a Mosaic official, Andy Jung, said the tariffs are not the reason for the price increase and that the current market is not driven “merely by a ruling for fair trade.”

The effect of consolidation

President Joe Biden issued an executive order in 2021 promoting competition in the economy, including the agriculture sector and the fertilizer industry specifically. “Consolidation in the agricultural industry is making it too hard for small family farms to survive,” the order reads.

In response to the order, the US Department of Agriculture collected comments from agricultural producers on competition, access to fertilizer and supply chain concerns. From more than 1,600 responses, 72 percent described concerns about the power of fertilizer manufacturers and 62 percent described what they saw as unfair price-setting practices.

While the study from Iowa State University does acknowledge market consolidation, it dismisses it as a factor of price increase. Hart said he sees the consolidation, but can’t prove manipulation in such an unstable time.

“You just can’t separate out what’s happening and whether there is a competition problem in this market or not,” Hart said.

While many factors have made the ingredients for fertilizer more expensive, the increase in profits is disproportionate to the increase in production costs – basically, companies are making a lot more money than they’re spending. 

In 2022, Nutrien’s cost of goods sold increased by 24 percent compared to the year prior; however, its profits were up 142 percent from 2021. CF Industries saw its profit increase by 212 percent in 2022, while the cost of manufacturing and sales was only up 28 percent. For Mosaic, profits were up 120 percent in 2022, but cost of sales only increased by 46 percent.

Although corn farmers enjoyed the highest corn prices on record in September 2022, their profits were offset by increased fertilizer prices.

“These [fertilizer] corporations are well aware of their leverage and have used the cover of consecutive global crises to raise prices far beyond those demanded by necessity,” Farm Action said in a comment to the USDA.

Farming communities hit hardest

Small farmers, business owners and rural communities have struggled to pay bills amid these record costs and industry profits.

Gary Hamilton owns a small business in northeast Missouri called Frankford Farm Supply, where he sells fertilizer and farming equipment. He started the company about 30 years ago.

Hamilton’s store is down the road from one of many corporate-owned Nutrien stores scattered across rural America. Hamilton said that Nutrien’s prices are lower and he just can’t compete as a small family-owned business with less than 15 employees.

When fertilizer prices go up, Hamilton’s credit limit doesn’t. This means he may not be able to serve as many customers as he used to, and those customers have to turn to other stores. 

“Because of the high prices, I actually lose business. And when I lose business, then I have less money to pay for health insurance, fuel, salaries, wage increases, day-to-day things that businesses need to survive,” Hamilton said.

Fertilizer prices are expected to fall eventually, with lower demand from farmers helping to rebuild supply, experts say. But it will be hard to lessen dependence on fertilizer anytime soon. While farmers and small business-owners may complain about fertilizer prices, they will continue to pay for it, Hart said, because their business—and the food supply—depends on it.

This story is part of The Price of Plenty, a special project investigating fertilizer from the University of Florida College of Journalism and Communications and the University of Missouri School of Journalism, supported by the Pulitzer Center’s nationwide Connected Coastlines reporting initiative and distributed by the Mississippi River Basin Ag & Water Desk.

The post Fertilizer Companies Cash in While Farmers and Communities Struggle appeared first on Modern Farmer.

But now, a group of researchers from the U.K. has built a roadmap that quantifies the source of emissions and outlines what reduction methods are possible. The study, published in Nature Food, found that two-thirds of all greenhouse gas emissions take place after fertilizers are applied onto cropland, while one-third of emissions result from fertilizer production. A combination of technical, agricultural and policy interventions in both areas, however, could reduce emissions by as much as 80 percent by 2050, the study found.

Researchers say increasing the efficiency of fertilizer use is the single most effective strategy to reduce emissions. Precision agriculture, the timing of application, using improved plant breeds that better utilize fertilizer and adopting improved irrigation methods are outlined as ways to reduce emissions by nearly 50 percent. 

They suggest that replacing some of the fertilizers with the highest emissions, such as urea with ammonium nitrate, could reduce emissions by anywhere between 20 percent and 30 percent. Fertilizers could be mixed with chemicals called nitrification inhibitors, which prevent bacteria from forming nitrous oxide, resulting in an emission reduction between 42 percent and 55 percent. 

The research is the first of its kind to make the calculations from petrochemical production to farm application. Notably, findings also revealed that manure and synthetic fertilizers emit the equivalent of 2.6 gigatonnes of carbon per year—more than emitted by global aviation and shipping combined. 

“I see this opening the door to a lot of other important questions of how we can best reduce the amount of fertilizer as much as we can, without any loss in productivity of crops,” says André Cabrera Serrenho, a co-author of the paper and assistant professor for Cambridge University’s Department of Engineering. “This is what matters at the end of the day, and we have started to paint a clearer picture of it all.”  

Both the production and use of fertilizers, particularly nitrogen fertilizer,  release carbon dioxide, nitrous oxide and methane. Natural gas, coal and oil are used as feedstock and fuels for the production of ammonia, a crucial ingredient in fertilizer.  These gases are also released from the extraction and combustion of these fuels as well as the product of chemical reactions. Additional emissions result from the generation of electricity used to drive the compressors and pumps. 

When fertilizers are used on cropland, nitrous oxide is generated through a chemical reaction between soil bacteria and the fertilizer via nitrification and denitrification. Carbon dioxide is also produced as urea and ammonium bicarbonate break down in the soil.

The paper states that its recommendations will only be worthwhile if the fertilizer industry takes steps to decarbonize—a specific area where public and private investment could also be beneficial. Electrolysis could be used to supply hydrogen in replacing ammonia synthesis, where up to 27 percent of total emissions could see a reduction. Electrifying the production process using electric heating also has the potential to reduce 21 percent of total emissions by avoiding fuel combustion. Carbon capture and storage was also outlined as having the potential to reduce current emissions by 25 percent by 2050. 

Cabrera Serrenho says he hopes the research helps facilitate better public policy towards emission reductions. 

“Farming is an incredibly tough business at the moment,” he says. “There are very few incentives right now for both farmers and fertilizer companies to care about emissions or to tackle fertilizer use because it’s largely driven by costs. I believe our research highlights some need for incentives to facilitate behavior. ”  

The study’s findings come against a backdrop of widespread global inflation, and countries such as Holland, New Zealand and Canada face political tensions with farmers who fear agriculture emission reduction policies will curtail food production and, in turn, their profits. But for the U.S., where the Biden administration has been clear that net-zero emissions will require adjusting agricultural systems, the study’s recommendations present a possible way forward.  

Cabrera Serrenho says the new study only scratches the surface of what’s possible. Right now, he’s keen on exploring the impact of specific dietary changes on fertilizer use and emissions. 

“It’s worth pointing out that we still have 20 percent of emissions that haven’t been accounted for, that we don’t know how we could possibly eliminate [them],” he says. “This is important and yet concerning as we set out to make food systems more sustainable.”

The post It’s Possible to Reduce Fertilizer Emissions by 80 Percent Before 2050 appeared first on Modern Farmer.

“It’s very gut-wrenching,” he said. “It’s very difficult to be optimistic about the future because these prices are so high.”

This year’s drastic increase in fertilizer prices has hit farmers’ pockets, and many have opted to buy less fertilizer and look for other alternatives to nourish the soil.

However, fertilizer manufacturers have largely escaped unscathed: The high prices — which have soared past inflation — have cushioned their bottom lines from any decline in sales, according to financial reports.

This year, giant fertilizer companies hauled in hundreds of millions in net earnings. The rise in profits represents massive percentage increases since last year. One major producer’s earnings jumped more than 1,000% in the first nine months of 2022 than in the same time period last year.

Lillibridge’s 2,500-acre farm in Vinton, a town in Benton County, mostly grows corn, a crop that requires a lot of fertilizer compared to soybeans or wheat.

Although corn has sold at high prices over the last two years and grain is expected to remain high, Lillibridge said it’s “very frustrating as a farmer” right now. Farmers could be paying hundreds of thousands more for fertilizer, he said.

“It’s difficult to be able to pencil this out,” he said of planning the year ahead. “Right now, I can’t even get a price on fertilizer for spring. So how do I make any decisions?”

Fertilizer — which makes soil more productive — can be the difference between a good and bad harvest in many cases. Because of that, modern American row crops have become dependent on fertilizer, after generations of farming have degraded topsoil.

Runoff from fertilizer also can have disastrous downstream effects. It exacerbates the “dead zone” — an area where fish can no longer live — in the Gulf of Mexico, and it poisons drinking water.

Midwestern farmers spent nearly $4 out of every $10 of the cost of growing corn on fertilizer in 2021, according to the most recent data of the USDA’s Commodity Costs and Return. For soybeans, fertilizers account for less than $2 out of $10 of operating costs.

“The increase in fertilizer prices has probably been the number one issue” for farmers, said Nicholas Paulson, professor in agricultural economics at the University of Illinois at Urbana-Champaign.

Paulson said fertilizer use is significant for soybeans, but corn is more dependent on fertilizers — especially nitrogen fertilizer, one of the main types of fertilizer, along with phosphate and potassium.

Fertilizer prices have risen for the past two years but reached record highs last spring. Multiple factors have driven the increase.

Russia’s invasion of Ukraine (both countries are major producers), the subsequent economic sanctions and disruptions to Black Sea trade routes have further increased trade costs and uncertainty for Russian and Belarusian exports.

Prices for fertilizer have fallen since spring but remain high. While not as high as in the spring, fertilizer costs are significantly higher than a year ago and remain higher than in 2019.

This increase is considerably higher than for other prices across the economy. From the third quarter of 2019 to the same period this year, the average price of two of the most widely used types of fertilizer, diammonium phosphate (DAP) and potash, doubled in cost, according to an analysis of DTN/The Progressive Farmer fertilizer price data by Investigate Midwest. In contrast, overall inflation in that period was 20%.

But the most significant price increase over that same time period has been for anhydrous ammonia, an effective and widely used nitrogen fertilizer. The price of anhydrous ammonia fertilizer increased by 152%.

“This is not normal,” said Lillibridge, who also is a member of the board of directors for the Iowa Corn Growers Association. “In years past, we’ve had a pretty good idea what we could buy fertilizer for in the fall and what we could buy it for in the spring.”

He said that’s a burden for farmers because they have had to triple their fertilizer budget. If they had planned to invest $400,000, that means they now have to spend $1.2 million, he explained.

“I hear more of my farmer friends say, ‘I don’t even know why I do this anymore,'”  Lillibridge said.

Frustrations with a concentrated market 

Multiple factors influence the price of fertilizers.

The price of natural gas, which is used in nitrogen-based fertilizers production, affects the cost, as do farmers’ returns. When farmers make more money, fertilizer companies charge more, agricultural economist Carl Zulauf said.

Higher grain prices — from corn to wheat to sunflower oil — have boosted farmers’ profits to nearly $161 billion this year, up 14% from the previous year, according to U.S. Department of Agriculture estimates.

“We as farmers feel very offended that just because corn prices went up, the fertilizer prices went up,” said Dennis Friest, Iowa Corn Growers Association president, attributing price increases to a concentrated fertilizer market made up of a few giant players. “They have total control over whatever price they charge.”

Two companies supply most of North America’s potash fertilizers, while four supply 75% of U.S. nitrogen fertilizers, according to a March 2022 U.S. Department of Agriculture report.

The report even warned of concentration: “These companies’ possession of scarce resources, often in other countries, and control over critical production, transportation, and distribution channels raises heightened risks relating to concentration and competition,” it read.

Nutrien, a Canadian company formed through the January 2018 merger between PotashCorp. and Agrium, and Mosaic, based in Florida, dominate the potassium fertilizer market.

Meanwhile, the major players operating in the nitrogen fertilizer market included CF Industries, an Illinois-based company; Nutrien; Mosaic; and the Norwegian chemical company Yara.

Wes Shoemyer, a former state senator in Missouri and a corn farmer who said the high prices made him find a biological alternative to fertilizer from a company named Pivot Bio, said he thinks the Biden administration should investigate the concentrated market.

“We have to enforce the antitrust rules,” he said. “We’re seeing this administration become more aggressive on many antitrust laws.”

A year of cash flow for manufacturers

Although the rise in fertilizer prices has hurt farmers, it has led fertilizer manufacturers to record triple-digit profit increases for most of this year, according to reports that Mosaic and CF Industries filed with the U.S. Securities and Exchange Commission and the Canadian company Nutrien publishes on its website.

For example, Mosaic’s net earnings totaled $842 million in the first nine months of 2022, representing an increase in profits of 217% over the same amount of time last year. A company’s net earnings indicate how much money it made in a given period after factoring in expenses, like operating costs.

Mosaic did not return requests for comment.

CF Industries and Nutrien also saw windfalls. CF Industries reported more than $2.49 billion over the first nine months of 2022 — a 1,075% bump compared to the same amount of time last year.

When asked about its earnings, a CF industries spokesperson pointed to a post on its website. The post said prices for nitrogen fertilizer, the company’s focus, are determined by high natural gas prices.

“European natural gas prices have hit record highs in early March 2022 due to the uncertainty created by the invasion of Ukraine by Russia, which is a major supplier of natural gas to Europe” the post reads in part. “This affects prices worldwide.”

Nutrien also pointed to a post on its website explaining key drivers of fertilizer costs, including natural gas prices. The company’s president and CEO, Ken Seitz, touted his company’s high earnings in a press release: “Nutrien has delivered record earnings in 2022 due to the strength of agriculture fundamentals, higher fertilizer prices and excellent retail performance.”

In their reports, the companies mentioned that high fertilizer prices have caused farmers to buy less fertilizer. However, this drop in sales does not affect their earnings growth.

“They make excuses for price gouging,” said Joe Maxwell, president of Farm Action and former Democratic lieutenant governor of Missouri. “They have blamed high natural gas prices. They blamed hurricanes in Louisiana and Florida, and they blamed COVID. … The truth is that they’re exhibiting monopolistic practices within the marketplace.”

Investigate Midwest is an independent, nonprofit newsroom. Our mission is to serve the public interest by exposing dangerous and costly practices of influential agricultural corporations and institutions through in-depth and data-driven investigative journalism. Visit us online at www.investigatemidwest.org

Mónica Cordero is a corps member with Report for America, a national service program that places journalists into local newsrooms.

This story is a product of the Mississippi River Basin Ag & Water Desk, an editorially independent reporting network based at the University of Missouri School of Journalism in partnership with Report For America and the Society of Environmental Journalists, funded by the Walton Family Foundation. 

The post Farmers Frustrated as Fertilizer Costs Soared in 2022 appeared first on Modern Farmer.