Multinational fertilizer companies, many of which are based in North America, are reporting record profits despite rising production costs and declining product sales. The high costs of fertilizers have been noted not only here in Canada but globally, with warnings that these costs could trigger food crises similar to those that occurred in 2007-2008 in parts of the world. I have.
Given declining sales and rising production costs, some food and agricultural organizations have pegged these prices artificially high due to the concentration of firms and lack of competition in the sector. I believe that this is the case.
Agricultural organizations across North America and a global non-profit that monitors food security issues have tagged the flopping profits of major fertilizer companies as a possible collusion, and have asked governments to take action against them. These gains come at a time when farmers’ crop incomes are improving. match? I’ll probably say a few things, but research might reveal something else.
In Canada, farmers have increased their fertilizer prices by 2x to more than 250% over the five-year average this year.
But the National Farmers Union (NFU) stresses that the lack of competition could make manipulative pricing much easier. In a letter to the House Agriculture Committee, the NFU said:
“…these four companies control 95% of Canada’s ammonia capacity and 100% of its urea capacity. On a North American basis, these same four companies control 74% of its ammonia capacity and its urea capacity. We manage 84% of
While demand for these fertilizers has declined and production costs have risen, profits for some fertilizer companies have at least doubled in the first half of 2022 compared to 2021.
Consider the recent earnings performance of some of the companies that dominate the Canadian nitrogen fertilizer market. Nutrien Ltd. reported his $5 billion net profit in the first half of 2022. That’s double what he did for the same period in 2021. CF Industries and Yara International also reported net profits that doubled in the first half of 2022 compared to 2021.
The NFU is calling on the House Agriculture Committee to “immediately conduct a thorough review of fertilizer pricing, sector structure, and the behavior of the largest corporations.” In his August letter to the commission and state agriculture ministers, the NFU said record gains had been observed in all three of his major fertilizer types of nitrogen, phosphorus and potassium. says. The NFU also requested an investigation earlier this year.
Canadian farmers are not the only ones bearing the brunt of rising fertilizer prices. US farmers are also asking their governments to investigate potential manipulation of fertilizer prices. They believe that the fertilizer company’s financial records, these record profits, gain production costs and Decrease sale.
More than 24 food, agriculture and rural organizations in the United States have teamed up with Farm Action to send a letter to the USDA calling for action, pointing out that fertilizer companies’ pricing system is robbing farmers of profits. The group is calling on the USDA to take steps to decentralize fertilizer companies’ production and market control.
The global situation regarding fertilizer prices and the concentration of companies in this sector is very similar. Over the past 70 years, since the end of World War II, the use of artificial fertilizers to enhance crop production has increased, and today more than 50% of global agricultural production depends on these artificial nitrogen and other fertilizers. We have reached the point that fertilizer.
Since the 2000s, there have been several acquisitions and mergers in this sector, consolidating the fertilizer production industry into a handful of multinational companies. Specifically, Nutrien (Canada-based), Mosaic (US), Yara (Norway), CF Industries (US), and K+S (Germany). The industrialization of agriculture around the world has created a dependence for farmers on inputs that are said to increase crop yields. It can hurt farm profits as we see fertilizer prices and windfall profits.
The situation has reached crisis point again, with fertilizer prices affecting food security in many ways. Rising fertilizer prices in Canada will affect the income of farms that have become dependent on the use of artificial fertilizers. In Africa, small landowners who have become dependent on fertilizer use in the hope of better yields may find themselves unable to pay the higher input costs. As it goes up, the cost of food goes up.
Ultimately, farmers, consumers and taxpayers bear the burden of increased agricultural production costs. In some cases, as in Canada, this can be achieved by increasing support for federal and provincial programs. Consumers pay more in stores…or line up at food banks when they can’t. is paying for
And if this isn’t enough, the legacy of our dependence on artificial fertilizers extends beyond the benefits of windfall to destructive practices at the community level. The use of artificial fertilizers produced with fossil fuels is driving agriculture’s contribution to greenhouse gas emissions and climate change.
But this dependence and its impact, and whether the price is worth the profit… is the gist of another column, and a story for another day.
Farmers’ group calls for investigation into rising fertilizer costs
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