Oil and gas prices could increase fertilizer costs
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Oil and gas prices could increase fertilizer costs
Rising oil and gas prices triggered by tensions between Russia and Ukraine are putting pressure on agricultural input prices.
University of Illinois economist Gary Schnitkey says Brownfield Russia is a major supplier of oil and gas to Western Europe, and the United States is helping to fill the gap.
“So we’re seeing changes in the way energy moves, and that’s obviously not helping our energy prices, and it’s probably going to keep our input at higher levels.”
He says the price of fertilizers such as nitrogen, DAP and potash are usually influenced by energy markets.
“Fertilizer consumes a lot of energy. For nitrogen, a major input is natural gas. So if oil grows and natural gas grows, that tends to put increasing pressure on fertilizer prices. ”
Despite all the volatility he suggests, farmers should accept high levels of crop insurance coverage.
“We may want to do more in terms of risk management, we may want to do some ECO (Enhanced Coverage Option) or SCO (Supplementary Coverage Option) supplements.
Schnitkey says an escalation of the Russia-Ukraine conflict would be a double-edged sword for US grain farmers, as it would likely cause both entry and grain prices to rise.
https://brownfieldagnews.com/news/oil-and-natural-gas-prices-could-push-fertilizer-costs-higher/ Oil and gas prices could increase fertilizer costs
