Fertilizer Prices: The 2022 Shock That Hit Farmers Hard
Fertilizer is one of the biggest costs on a modern farm, and its price is notoriously volatile. After decades of gradual increases, fertilizer prices erupted in 2021–22 — driven by soaring natural gas costs and the disruption of Russia's invasion of Ukraine — squeezing farmers worldwide. This guide charts U.S. fertilizer prices over three decades and explains why this unglamorous input matters so much for the price of food.
How much have fertilizer prices risen?
Measured by the producer price index, U.S. fertilizer prices have more than quadrupled since 1990. But the path is jagged, not smooth: long calm stretches punctuated by violent spikes, most dramatically in 2008 and again in 2021–22. The 2022 spike pushed the index to its highest level on record, a body blow to farmers who had budgeted for far less. Each spike eventually eased, but rarely all the way back to where it started.
The 2022 fertilizer shock
The 2021–22 surge was extraordinary. Two forces collided: the price of natural gas — the key feedstock for nitrogen fertilizer — soared, and Russia's invasion of Ukraine disrupted global supply, since Russia and Belarus are among the world's largest fertilizer exporters. Sanctions and trade chaos sent prices to record highs just as farmers were planning their plantings. Some cut back on fertilizer, risking lower yields; others paid up and watched their costs explode.
Why fertilizer prices spike
Fertilizer is unusually exposed to shocks. Nitrogen fertilizer is made from natural gas, so its price rides the volatile gas market. Potash and phosphate come from a handful of countries and mines, so geopolitics and export restrictions can choke supply fast. And because every farmer needs fertilizer at the same time each season, demand is inflexible — when supply tightens, prices have nowhere to go but up. That combination makes fertilizer one of the jumpiest costs in all of agriculture.
From fertilizer to food prices
Fertilizer sits at the very start of the food chain, so its price ripples outward. When fertilizer costs spike, farmers either pay more — passing costs down the line — or use less, which lowers crop yields and tightens supply. Either way, the result tends to be higher food prices down the road. The 2022 fertilizer shock was one of the hidden drivers of the global food-price surge that year, a reminder that the cost of feeding the world starts with the cost of feeding the soil.
Frequently asked questions
How much have fertilizer prices risen?
U.S. fertilizer prices have more than quadrupled since 1990, with violent spikes in 2008 and a record high in 2022. The latest figure is shown above.
Why did fertilizer prices spike in 2022?
Soaring natural-gas prices (the feedstock for nitrogen fertilizer) collided with Russia's invasion of Ukraine, which disrupted supply from major exporters Russia and Belarus.
Why are fertilizer prices so volatile?
Nitrogen fertilizer is made from natural gas and rides its volatile price; potash and phosphate come from few countries, so geopolitics can choke supply; and seasonal demand is inflexible.
How do fertilizer prices affect food prices?
Fertilizer is a major farm cost, so spikes either raise food prices as costs pass down the chain, or cut yields as farmers use less — both pushing food prices up.
Where does fertilizer come from?
Nitrogen fertilizer is made from natural gas; potash and phosphate are mined in a handful of countries, with Russia and Belarus among the largest exporters.