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Russia's invasion of Ukraine exacerbates high fertilizer prices, limited availability

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Glenn Carstens-Peters / Unsplash
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Even before the war in Ukraine, fertilizer costs were high, but now more pressure is on the market.

Russia and Ukraine are both major producers of nitrogen in the world. The chemical is in fertilizers like anhydrous ammonia, urea and urea ammonium nitrate that are used for crops in Oklahoma.

Fertilizer prices in some areas were up 300% before the invasion, according to the Farm Bureau. Brady Sidwell, president of Enterprise Grain Company in Kremlin, northern Oklahoma, said fertilizer prices change almost hourly.

“The days of calling and saying, ‘Hey, what is the price of this?’ and then, a couple days passing and somebody making a decision, are gone,” Sidwell said.

His company supplies fertilizer to farmers across the state and parts of southern Kansas. Sidwell said producers, who have been waiting to topdress fields because of fertilizer prices and extreme dryness, are now facing higher prices and limited availability.

Sidwell said the overall situation creates frustration among his customers.

“You know, if a farmer calls in, and he’s trying to buy fertilizer, and he can’t get a bid on it, and it’s not us not bidding it,” Sidwell said. “It’s that the suppliers upstream are not providing us the availability.”

There are types of fertilizers that work best under different conditions like the type of crop, the farming methods used, the location, weather conditions, crop rotation and soil health. But there are not many different macronutrients like nitrogen and phosphorus in fertilizers, just different ways to mix the ingredients.

At his business, Sidwell said it uses other independent fertilizer suppliers, not major ones.

“And I think overall, that’s going to be key in the supply chain; is diversification, you know?” Sidwell said.

Oklahoma’s wheat is about to come out of dormancy, and this is a critical time when the crop needs moisture and nitrogen. There are some areas in the western part of the state where they have had over 130 days with less than 0.10 inches of rainfall, like in Texas, Roger Mills and Ellis counties, according to Mesonet.

“It’s a bit of a double whammy at the moment with high fertilizer prices and lack of availability which also drives prices and then also the drought,” Sidwell said.

Even at high commodities prices, Sidwell said there’s uncertainty among farmers about how much money they should be putting into this crop because producers don’t know if they will get a return on their investment.

“These two countries, Russia and Ukraine, for the ag sector are huge suppliers,” Sidwell said. “For ag and energy, both are huge suppliers into Europe and obviously impact the global market.”

Anna Pope was an intern at KOSU between May 2021 to May 2022.
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