The world’s two top fertilizer manufacturers issue a warning: the surge in fertilizer prices will continue

On Monday (1st) Eastern time, the world's largest fertilizer company-Canadian Nutrien Ltd. The company raised its full-year performance forecast because it forecasts that strong crop prices will support fertilizer spending. The company said in a statement that, driven by record demand and strong crop profits, potash prices in all major markets continue to rise. Coincidentally, Mosaic Co., the world's largest producer of concentrated phosphate fertilizers, also stated in a statement that it "predicts that (fertilizer) prices will continue to rise." Maison stated that since 90% of the company's sales in the fourth quarter of this year have been pre-sold, some customers have further requested prepayment for the second quarter of 2022. As the price of natural gas soared, some European factories were forced to suspend or cut production, and the price of chemical fertilizers also soared. According to data from Green Markets, the spot prices of potash and urea (a nitrogen fertilizer) in the United States have more than doubled this year. The soaring price of chemical fertilizers has raised concerns. The market is concerned that farmers may reduce their purchases of chemical fertilizers or shift more land to crops that require less chemical fertilizers. According to reports, the surge in fertilizer prices may cause US farmers' corn planting profits to drop by about a quarter next year, which may prompt them to shift millions of acres of land to lower-cost soybeans, thereby further pushing up soybean inventories. Terry Roggensack, an agricultural expert and co-founder of the Hightower Report, predicts that the United States, as the world's largest corn producer, may have a return on operating costs to its corn producers as low as $430 per acre. Corn needs more fertilizer than other crops such as soybeans and wheat. Roggensack pointed out that farmers may find soybeans more attractive because the return on operating costs for this crop is $500 per acre. If many growers start to change their planting methods, global soybean stocks may increase substantially, and soybean production in the United States and Brazil will probably reach record levels. Food inflation may increase due to rising planting costs, and the decline in the output of major crops such as corn may push up crop prices, thereby exacerbating food inflation. The soaring fertilizer prices have caused many analysts to lower their expectations for the corn planting area next year. The cost of nitrogen fertilizer, which is mainly used for corn, is about twice what it was a year ago. According to data from Green Markets, expensive fertilizer prices may push up the production costs of US corn growers by 16%. Yarra, one of Europe's largest natural gas and fertilizer companies, said at the end of October that soaring fuel and natural gas prices in Europe may cause global agricultural production to plummet, and some countries around the world may fall into a food crisis. The Global Food Price Index and grain supply and demand briefing data released by the Food and Agriculture Organization of the United Nations in October showed that with the increase in grain and vegetable oil prices, global food prices rose for the second consecutive month in September, and once again set the highest level in a decade.