Jan 12, 2022
WASHINGTON, DC -- This week, Texas A&M University’s Agricultural and Food Policy Center (AFPC) published a report analyzing the economic impacts of higher fertilizer prices on the AFPC’s 64 representative crop farms.
The report, requested by U.S. Representative Julia Letlow, from the 5th District of Louisiana, shows the effects of exploding fertilizer costs on farms.
“Recent fertilizer price increases across all three primary nutrients have caused significant concern among producers. For the 2022 crop, producers are experiencing sticker shock as well as product shortages,” says the report.
Relative to 2021, the report suggests that fertilizer costs will be 80 percent or higher for farmers going into the 2022 crop season based on current fertilizer spot market prices.
According to the report, rice farms will face the highest per-acre increase at $62.04 on fertilizer alone. Fertilizer costs will increase $98,000 for rice farms on average.
“This report clearly illustrates that the rise in cost of production is putting enormous strain on producers, and given flat rice prices, we’re facing incredibly difficult situations as we approach planting season,” said Kirk Satterfield, a Mississippi rice farmer and chair of USA Rice Farmers. “Farm Bill programs are not designed to react to these economic situations. We’re hopeful that Congress and the Administration will explore all avenues to provide farmers with additional assistance in a timely manner.”
The report adds: “The farm safety net is designed primarily to address price and yield risk or a combination of the two (i.e., revenue volatility). It is not designed to account for reductions in net farm income due to increased costs of production. In other words, the farm safety net does little to provide assistance to producers in the circumstances they are currently facing.”