Fertilizer prices reach a record high

The price of fertilizer has been on a steady increase since the late 1980s. This price increase has led American farmers to worry about a reliance on the global supply chain and launched federal incentives to make the chemicals domestically. 

Prices paid to chemical companies for fertilizers and other agricultural pesticides have increased more than 250% from 1986 to 2022. 

A major price increase occurred from 2007 to 2008, which was caused by a supply shortage.

The fertilizer industry’s most recent price jump was from 2021 to 2022, when the price of fertilizer rose 28%, according to the U.S. Bureau of Labor Statistics. The agency collects and analyzes the Producer Price Index, an indicator that measures the change in prices paid to a producer for their goods or services over time and accounts for inflation. 

One significant contributing factor to the recent price spike has been the ongoing Russian -Ukraine war. Both nations are major fertilizer suppliers, and trade restrictions and embargoes have increased demand for American-made fertilizer products. The PPI data does not include foreign imports. 

Price data for 2023 has not been finalized yet, but preliminary data indicates fertilizer prices decreased.

In December, an Iowa-based merger of major fertilizer companies fueled backlash from agricultural watchdog groups and local officials concerned over increased consolidation. Fertilizer companies have seen record profits in recent years, sparking federal attention. 

The Biden administration announced plans in recent years to expand American-made fertilizer and spur competition with a $500 million grant program. Last summer, the administration increased the program’s funding pool to $900 million.