The squeeze on the supply of fertilizer has been building for roughly five years. Rising demand for food and biofuels prompted farmers everywhere to plant more crops. As demand grew, the fertilizer mines and factories of the world proved unable to keep up.
Some dealers in the Midwest ran out of fertilizer last fall, and they continue to restrict sales this spring because of a limited supply. “If you want 10,000 tons, they’ll sell you 5,000 today, maybe 3,000,” said W. Scott Tinsman Jr., a fertilizer dealer in Davenport, Iowa. “The rubber band is stretched really far.”
The ABC reports that a Chinese export tax on fertiliser is set to send prices soaring.
The latest National Australia Bank agribusiness survey shows a skewed picture in rural Australia, with farmers feeling better about the future, but agribusiness not so sure. A facade of confidence is emerging as world commodity prices stay high, masking the pain being felt from rising input costs, such as fertiliser, fuel and chemicals.
The situation hasn't been helped by a decision from China to impose a 100 per cent tariff on exports of fertiliser. Former head of the Australian Fertiliser Services Association, Shane Dellavedova, says while Australia has some carry-over stocks following several poor seasons, farmers need to get ready for a big price rise.