Wall Street Journal video explains many reasons why fertilizer prices are so high and might go higher in 2023

The Wall Street Journal has a new video that clearly lays out the reasons for today's record fertilizer prices, how that affects agriculture and food prices worldwide, and why the cost could go higher.

An array of global supply-chain shortages have made it more difficult and expensive to manufacture fertilizer. In 2021, China halted exports of phosphate, a key ingredient. In December, the U.S. and the European Union imposed trade sanctions on Belarus, the world's third-largest potash producer, for alleged human-rights violations. Those and other trade restrictions involving Russia, Turkey, and Egypt slowed global exports. The U.S. imports nearly all of its potash—83% from Canada—but residents near at least one potential mining site in the U.S. have rebuffed the idea, Grist reports.

Recent trade sanctions on Russia have worsened the strain, since Russia is the world's largest fertilizer exporter and one of the top five potash producers. Even countries without sanctions against Russia must pay sky-high prices to insure the vessels carrying potash or fertilizer, since the war makes transportation much riskier. Meanwhile, "Rising natural gas prices have prompted some European factories to scale back fertilizer production," the WSJ reports. "Natural gas is another major Russian export and a key ingredient in making nitrogen-based fertilizer."

That all makes fertilizer nearly three times more expensive for American farmers as it was in early 2021, Joel Brinkmeyer, CEO of the Agribusiness Association of Iowa, told the WSJ. Farmers operate on tight profit margins, and fertilizer is already one of their biggest expenses. Higher costs get passed on to buyers such as grocery chains and animal-feed companies, and meat gets costlier.

Some farmers have delayed planting in hope fertilizer prices will fall, but later harvests could create more supply-chain snags. Some have cut back on fertilizer use; that could lower crop yields. Some are planting crops that need less fertilizer, such as soybeans, not corn. Some are considering alternatives to such as biologicals, natural fertilizers with microorganisms that boost soil fertility, but most aren't willing to alter such a basic production factor without good hope of better results.

The worst-case scenario, Brinkmeyer said, is that the shortage causes widespread shortages of crops and feed: "If we don't produce the crops, we can't probably produce the livestock and the poultry, and we get into actual food challenges in the U.S., and that would be a much, much greater concern than what we have today."