The situation in the US agricultural sector is really causing serious concern. The increase in prices for fertilizers, especially nitrogen and urea, by more than 30-47% is a record jump that will significantly hit the cost of agricultural products. This is reported by the Financial Times.
The USA traditionally imports a significant part of nitrogen fertilizers from the Persian Gulf countries and Russia. The aggravation of the conflict with Iran and sanctions risks disrupt supply chains, creating shortages and excessive demand.
The production of nitrogen fertilizers is an energy—intensive process (natural gas as a raw material). The rise in gas prices in the world directly pushes up the cost of fertilizers.
The peak of fertilization for winter crops and preparation for spring sowing occur in the autumn months. Farmers now have to buy resources at maximum prices, and this reduces profitability and may force them to reduce acreage or save on agrochemicals.
The forecast of the Federation of Farm Bureaus ("tense situation and unfavorable prospects") means that without government intervention (subsidies, release of strategic reserves, diplomatic mitigation of the conflict), autumn and winter will become a period of severe financial pressure for American farmers. This, in turn, may affect food prices both within the United States and on the world market.
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