USDA Data Tracks Fertilizer Price Increases
Data from USDA’s Economic Research Service details the increase in fertilizer prices. According to estimates from USDA, fertilizer represents an average of 36% of a farmer’s operating costs for corn, 35% for wheat, and 30% for sorghum. Fertilizer prices declined from 2014 through 2017 before a gradual increase in 2019. In late 2021, prices began to spike alongside rising natural gas prices—a primary input in nitrogen fertilizer production.
By December 2021, the average monthly spot prices of natural gas at the Henry Hub distribution hub in Louisiana were 45 percent higher than in December 2020. U.S. farmers use three primary forms of nitrogen fertilizer: anhydrous ammonia, urea, and liquid nitrogen. ERS estimates an annual price increase of 235% for anhydrous ammonia, 149% for urea, and 192% for liquid nitrogen as of December 2021. Researchers expect the spike in fertilizer prices to affect producer decisions going into the 2022/23 marketing year.