Biden Effect: Farms Fail As Fertilizer Prices Soar

Soaring fertilizer prices across the globe have impacted farmers making it more expensive to produce food and forcing them to cut back on production, The Wall Street Journal reported.

Diammonium phosphate, or DAP, a common component of fertilizer, cost $745 per metric ton in December 2021, more than double its average 2020 price, the WSJ reported.

Higher fertilizer costs could translate into increased food prices in the next year, worsening global hunger after the pandemic caused massive job losses and further growing inflation, the WSJ reported.

U.S. farmers have felt the impact of the rising fertilizer prices, causing some to alter their planting schedules, the WSJ reported. The high costs significantly impact developing countries with limited access to bank loans and therefore cannot afford the fertilizer.

Fertilizer demand in sub-Saharan Africa is projected to dip 30% in 2022 for this reason, resulting in a reduction of 30 million metric tons of food produced, or enough to feed 100 million people, according to the International Fertilizer Development Center.

“Lower fertilizer use will inevitably weigh on food production and quality, affecting food availability, rural incomes and the livelihoods of the poor,” Josef Schmidhuber, deputy director of the United Nations Food and Agriculture Organization’s trade and markets division, told the WSJ.

The surging prices also result from growing energy costs, with sky-high European natural gas prices in 2021 compared to in 2020, according to data obtained by the WSJ.

Nitrogen production factories rely on natural gas to turn chemicals into finished products, leading to increased fertilizer prices, the WSJ reported. Leading fertilizer exporters, including China, Turkey, Egypt and Russia, also curbed exports in the second half of 2021, which also added to price hikes.