While the war in Ukraine is taking a toll on
fertilizer markets, prices were already high in
late 2021. And they've increased further due to
the conflict.
Farmers are now left looking for workarounds as
spring planting progresses.
Associate professor of ag economics at the
University of Nebraska-Lincoln Lia Nogueira joins
us now with further perspective.
And Lia, thank you very much for your time here
this morning.
So how is the conflict between Russia and Ukraine
affecting the fertilizer market?
Well, as you noted, fertilizer prices were already
high in the latter half of 2021.
And it's a complex environment.
But part of the reason of these higher fertilizer
prices was because of increases in cost of
production. Natural gas, ammonia and coal, all
those prices were higher.
Because of that China and Russia imposed
restrictions on exports of fertilizers trying to
keep their domestic prices down.
Now, this is important because Russia is one of
the main producers and exporters of fertilizers.
And now with a conflict with Ukraine, we have our
western countries imposing sanctions because of
the conflict and Russia retaliating by restricting
exports of all sorts of different products,
including fertilizers, except to a few countries
within the Eurasian Economic Union.
And this, along with higher prices for oil and
natural gas has pushed fertilizer prices even
higher.
What does this mean for farmers here in the US?
Well, the upgoing growing season is already mostly
determined by this higher fertilizer prices.
But crop prices is also higher. So potentially
farmers could see some expected profit.
But past the spring planting, we have uncertainty.
And it really depends on how the conflict results.
It could be that some of these prices come down in
terms of inputs for fertilizers.
And also some of the trade restrictions could be
lifted
In the long term, how would this affect the price
and availability of fertilizer?
A couple of points.
First, some of the fertilizer plants in the United
States, Canada and Brazil have already increased
production.
But it may take a few years for those new
quantities to reach the market.
We also have high grain prices that are providing
incentives to increase fertilizer production, but
higher fertilizer prices are going to provide
incentives to farmers to maybe change their
application technology.
So we have this combination of higher fertilizer
prices, higher commodity prices, new information
entering the market, providing incentives to maybe
change some of the farm financial management
techniques for farmers making it very critical for
farmers to manage their financials in a different
You could go online to agecon.unl.edu for more
way.
Well Lia, thank you very much for your insight
this morning, Associate Professor of Ag Economics
at the University of Nebraska Lincoln Lia Nogueira
connecting with us here this morning.
information again.
Thank you Lia.