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A worldwide fertilizer shortage may shape what farmers plant next spring

Surging fertilizer prices are putting pressure on farmers as they start to look to the next planting season, and altering whether the plant corn or soybeans next spring.

Much of modern farming relies on chemical fertilizers. Only by turbo-charging the soil with those nutrients can farmers expect their corn harvests to yield enough grain to turn a profit, and do everything from sweetening your soda to fattening the cattle that provides your hamburger.

But a worldwide fertilizer shortage is driving a price surge. Iowa State University agricultural economist Chad Hart said some of the countries that usually export it, like China and Russia, have reduced their exports or are holding onto their own supply.

“You combine that with some of the shipping issues and that means we’re having a hard time getting fertilizer into the Midwest here right now,” Hart said.

Prices are two to three times higher than last year. That’s coupled with demand from farmers who are finishing up harvest and preparing to fertilize their fields for next year.

Global supply chain and shipping problems have left agricultural cooperatives unsure they can get enough fertilizer to match demand from farmers.

Co-ops are the middlemen between farmers and fertilizer manufacturers. They buy fertilizer several months in advance so that farmers can have it by the time they need it in the fall, said Dave Holm, the executive director for the Iowa Institute for Cooperatives.

“We typically will make those fertilizer commitments in May or June for this fall. And we pay for that when we order it. And then we wait to get it,” Holm said. “And we're reticent this year ... to sell it if (we) don't have it.”

Hol said co-ops have a limited supply. He hasn’t heard from anyone who doesn’t have any fertilizer to sell. He said most Iowa co-ops that are members of the institute are trying to take care of their existing customers first.

“If you walked in and had not done business traditionally with us, we may say ‘I'm sorry, we don't have a product to sell you,’” Holm said.

The limited supply drove up fertilizer prices two to three times higher than last year. ISU’s Hart said it will affect the choices farmers make for next year’s crop.

“It makes it more likely that farmers will switch some acreage from corn to soybeans to try to avoid the higher prices, the higher cost here of fertilizer,” Hart said.

Hart said some farmers will likely switch some acres to soybeans because soybeans don’t need fertilizer to produce a crop the way corn does.

Fertilizer prices haven’t been this high since 2009-2010. Hart expects the prices to remain high until after planting season in the spring.

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