Food prices are already up more than 30% around the world this year, but a rising crisis in the fertilizer industry all but guarantees they’re about to go even higher—and take food prices along for the ride.
Fertilizer plants in Europe have cut back production, and China is cutting exports to focus on its own agricultural industry. Add in shipping problems and inflation, and U.S. farmers are having a hard time getting their hands on the critical supply, much less pay the higher costs for it.
Synthetic fertilizers are an essential part of modern farming. Bloomberg points out that without nitrogen fertilizers, the global population today might be just half of current totals, due to how much those fertilizers have increased crop yields.
And since fertilizer is so widely used, the shortages could result in substantial price increases on items ranging from coffee to corn to rice.
Nutrien and Mosaic, two of the world’s top fertilizer producers, say they expect prices to continue to rise, as the costs of components used to make nitrogen fertilizer are hitting 13-year highs as well. That’s sending crop future prices higher. Corn is up 10% since the middle of last month, and wheat is at its highest level since 2012.
Food prices in the U.S. have been rising at a staggering rate across the board this year. Bacon and pork ribs cost nearly 20% more than a year ago, and eggs are 13% higher.