Fertilizer price increases gobble up agricultural profits; advocates for farmers blame consolidation of the industry

Graph by Economic Research Service, U.S. Department of Agriculture. Click the image to enlarge it.

"Farm advocates say that record-breaking fertilizer prices are decimating farmer profits and pulling wealth out of rural communities for the benefit of a handful of corporations that control the market," Claire Carlson reports for The Daily Yonder. "Groups such as Farm Action are calling on the federal government to enforce antitrust laws against the small number of fertilizer manufacturers that remain in the industry."

The price of most fertilizers has skyrocketed since 2020, but crop prices aren't, so farmers are eating the difference. The fertilizer industry blames pandemic supply-chain issues and increased natural gas prices, but many farming advocates blame fertilizer industry near-monopolies. "Four corporations supply 75% of the nitrogen fertilizer in the U.S.: CF Industries, Nutrien, Koch, and Yara-USA," Carlson reports. "Two corporations supply all of North America’s potash, a potassium-based fertilizer: Nutrien Limited and the Mosaic Company. Between 1980 and the mid-2000s, the number of fertilizer producers for the U.S. dropped from 46 to 13 firms, according to Farm Action."

The war between Russia and Ukraine could affect fertilizer prices as well, since both countries are major exporters of natural gas and fertilizers. But the full impact may take a few months to become clear, according to an executive at the Federal Reserve Bank of Kansas City, Carlson reports.