In the last year the prices of nitrogen fertilizers in the international market have increased by at least 80%. This is the main reason for the corresponding increase in the price of food worldwide for years, a trend that is expected to continue.
Even so, world demand is far from having fallen, even the main world producers such as Russia, China and Turkey, have decided to limit exports to face the domestic market.
How it impacts Argentina
Marianela de Emilio, from INTA’s Las Rosas Rural Extension Agency, the specialist spoke in dialogue with Télam about the increase in fertilizer prices and its impact on wheat and corn. According to Emilio, the two main cereals grown in our country “are the most likely to pay the rise in prices of fertilizers with less planting area and / or lower level of fertilization”, that is, with a decrease in productivity, and that this situation affects all grain-producing countries.
“Assuming production costs in the core zone, south of Santa Fe, it is estimated that fertilizers represent 75% of the total cost of wheat implantation, when six months ago it represented 50%,” said de Emilio.
In corn, meanwhile, the cost of fertilizers represents more than 40%, compared to 30% in May; and in soybeans it is 14% of the total cost of implantation today, as opposed to the 10% that it represented six months ago.
In addition, the INTA technique added that the increase in cost of this input was also due to “supply problems after the health crisis, and subsequent energy crisis, which caused an increase in production costs.”
Fertilizers go up but grains go down
The fundamental problem for the profitability of the business is that this increase is contrasted with a decrease in the prices of the crop. For example, the specialist pointed out that from May to November 2021 “the international price of the fertilizers most used for the production of grains, based on nitrogen, such as urea, increased its price 268%, unlike the price of corn in the same period, which was down 22%.
At the local level and in dollars, in the same period, urea increased 190%, corn fell 8% and soybeans fell 3%, while wheat registered a 4% rise, “insignificant compared to the rise in fertilizers” , considered the INTA expert.
De Emilio concludes his analysis by saying that «possibly, if this situation is not reversed, it will affect planting and technology decisions to apply, especially the amount of fertilizer, considering that grain prices will not allow in many areas to invest in technology of inputs at the level that they did in the last campaigns ».
A strategy that can help to cope with this scenario without affecting the nutrition of the crops is to use fertilizers that reinforce the contribution of zinc, since it is a micronutrient that improves the efficiency in the use of nitrogen, giving greater value to each peso invested in the fertilization; And since most of the soils in Argentina are deficient in zinc, providing this nutrient is a good tool to boost yields, from the moment the crop is implanted, favoring the efficiency of nitrogen so that it yields 100 percent.