Why Are Fertilizer Prices So High Right Now for Farmers?

Normally spring is the time when fertilizer prices are higher than the rest of the year, but this year prices remain elevated.

    Various factors are behind the raises

Agweb.com reports five factors behind higher-than-normal amounts  farmers are  paying:

Josh Linville, VP of  StoneX, affered some reasons:

"1. European Production
Linville says European natural gas prices have skyrocketed, causing production to decrease.

"Europe is producing about 75% of normal," he says. "We have a shortage of all nitrogen products in Europe."

2. High Costs in Brazil
Brazil has a similar story and has had to decrease operations for the majority of the year due to high costs.

"They basically said 'We're not going to produce at a loss and will shut these plants down until we get back to normal'. Today, that's unfortunately still normal."

3. China's Restrictions
China holds a major share of fertilizer exports, and according to Linville, they have started taking measures to influence the market in nitrogen and phosphates.

"The government has figured out if they restrict exports, not only do I make sure there's enough for my people, but I also lower my domestic price," Linville says.

4. Supply Shortage in Egypt
Restrictions are also coming from Egypt due to heat.

"The public demand has skyrocketed as they try to cool their homes. When it gets like that, things start to get tight," Linville says. "The government will go to the industrial sector and tell them to turn off to get gas supplies to the people who need it."

5. Import Restrictions
In addition to export shortages from other countries, Linville says the U.S. has restricted imports from five major countries."