Fertilizer costs add to food price hikes

Dan Grech Apr 17, 2008
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Fertilizer costs add to food price hikes

Dan Grech Apr 17, 2008
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TESS VIGELAND: Credit isn’t the only thing in short supply these days. So is a long list of commodities, including rice, wheat and corn, as we mentioned yesterday. There are lots of factors driving the cost of food around the world. And one big one is fertilizer. Marketplace’s Dan Grech reports.


DAN GRECH: Fertilizer has become a precious commodity. The price has doubled in the past six months.

Today China, the world’s largest grain producer, said it would double duties on all fertilizers, to discourage its export. China is essentially sacrificing the domestic fertilizer industry to protect its farmers.

So why is fertilizer so expensive? High energy prices. Natural gas is a key ingredient of nitrogen-based fertilizers.

Jim Prevor is editor of Produce Business magazine.

JIM PREVOR: All the things that farmers need to grow products are going up. That includes transportation, fuel to run tractors, going well beyond just fertilizer prices.

China’s tight grip on fertilizer could have a global impact. It’s one of the principal suppliers to India, Pakistan, Australia and Latin America.

Parr Rossen is an agricultural economist at Texas A&M. He says these global forces will soon hit the grocery aisle.

PARR ROSSEN: Higher fertilizer prices are going to result in higher food costs as well as higher fuel costs.

But Rossen says farmers can’t simply do away with fertilizer without devastating their harvest.

I’m Dan Grech for Marketplace.

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