Mike Straumietis on Rising Prices and Farming: Explaining the Link

The substantial increase in fertilizer prices poses a huge challenge to farmers and hobby growers alike. As Mike Straumietis, Advanced Nutrients Founder and CEO, points out, farmers and ranchers have had problems due to the rise in fertilizer prices and worries about availability, especially concerning availability. The most significant concern of farmers as they begin to plan their potential purchases for the 2022 growth cycle is fertilizer prices, which comprise 15 percent of all cash costs in the United States. In addition, some farmers claim that fertilizer prices have increased by more than 300 percent while delivery schedules continue to be highly erratic.

For growers, these difficulties are challenging but not brand-new. In April 2008, potash prices rose by 100 percent, phosphate prices jumped by 93 percent, and nitrogen prices increased by more than 30 percent. Up until the end of 2009, this pattern lasted. The local fertilizer business could not regulate its production, resulting in a rise in fertilizer prices in 2008, falling stockpiles, and increasing domestic and international demand. The same elements, as well as other worries, according to Mike Straumietis, are raising costs.

The Crucial Elements Causing the Increase in Fertilizer Prices

All the essential nutrients used in the cultivation of the country’s biggest row crops, such as nitrogen (in the forms of liquid nitrogen, anhydrous ammonia, or urea), phosphorus (monoammonium phosphate – MAP, and diammonium phosphate – DAP), and potassium or potash, have been adversely affected by the force of rising prices, says Mike Straumietis.

Compared to September 2020 pricing, the cost of ammonia has increased by over 210 percent, liquid nitrogen by over 159 percent, urea by over 155 percent, MAP by 125 percent, DAP by more than 100 percent, and potash by more than 134 percent.

Since September 2008, Mike Straumietis has assessed the average cost of these nutrients using data from the Illinois cost of production. Anhydrous ammonia rose to 118 percent in the data, up from the usual $656 per metric ton. Furthermore, urea has surged by 101 percent from its normal price of $453 per metric ton, and liquid nitrogen has surged by 84 percent from its standard price of $305 per metric ton. In addition, DAP has gone up 50 percent from $550 per metric ton, and MAP increased 61 percent from $555 per metric. Lastly, potash jumped 61 percent from its regular $485 per metric ton.

Other Significant Factors Fueling Rising Prices of Fertilizers

Fertilizer is in high demand everywhere across the world. According to Mike Straumietis, it might be impacted by a variety of market factors outside the control of American producers. Almost 40 percent of all fertilizer components are exported, like other international commodities. Since demand from other countries and local factors like inflation dictates fertilizer production, exports significantly impact fertilizer pricing. The cost of delivering fertilizer to a certain place also affects fertilizer prices.

There are six essential crops that are responsible for about 33 percent of the world’s fertilizer consumption. After corn, which accounts for around 16 percent of the need for farm-use fertilizers globally, wheat comes in second with roughly 15 percent of that demand. Next, rice generates approximately 14 percent of the same global market for agricultural fertilizer. As Mike Straumietis notes, vegetables with 9 percent, fruits with7 percent, and soybeans with 5 percent are the final three essential crops on the list.

The United States is the third-largest producer of fertilizer in the world. The country must still acquire fertilizers like nitrogen and potash if they hope to cater to growers’ demands fully. The price set by the global market, along with shipping and transportation charges, must be covered by American dealers and producers of fertilizer and fertilizer components.

About Mike Straumietis and Advanced Nutrients

With a large and diverse research team of highly skilled and competent Ph.D. scientists, Advanced Nutrients have developed a wide range of next-generation products to nourish each phase of a crop’s cycle, from seed to senescence, unlocking their true genetic potential. Mike Straumietis, the Founder and CEO of Advanced Nutrients, has dedicated his funds and efforts to continue to work toward food security by developing systems that help provide life-giving essentials to thousands worldwide.