Fertilizer Price Surge Expected to Continue
Two fertilizer producers expect the crop-nutrient price surge will continue, reports Bloomberg.
Nutrien Ltd. raised its full-year guidance as it forecasts strong crop prices will support fertilizer spending. Prices for potash, a key soil nutrient-rich in potassium, continue to increase in all key markets driven by record demand and strong grower margins, the company said.
Its outlook came just as Mosaic Co., a phosphate producer, said in a statement it “expects upward pricing momentum to continue” as 90% of fourth-quarter sales are committed and priced, with some customers requesting commitments as far forward as the second quarter of 2022. Mosaic reported third-quarter adjusted earnings that missed the average analyst estimates, with lower potash and phosphate sales volumes, pushing shares lower in aftermarket trading.
Fertilizer prices have skyrocketed as soaring natural gas costs have forced some European production plants to halt or curtail production. U.S. spot prices for potash and urea, a form of nitrogen fertilizer, have more than doubled this year, according to Green Markets, a company owned by Bloomberg.
The price surge is stoking fears farmers may pull back on purchases or shift more acres into crops that require fewer nutrients. A drop in yields could drive crop prices higher, worsening food inflation.
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