Best of Bloomberg Intelligence (03/24/2022)

Alexis Maxwell discusses the impact of global fertilizer shortages on US farmers, highlighting that while supply is stable, prices are rising significantly. Fertilizer costs are expected to take up 50% of farmers' budgets, up from 30%. Despite higher costs, US farmers have access to domestic production, with 75% of nitrogen and phosphate sourced locally. Rising fertilizer costs contribute to food inflation, affecting consumer prices. Farmers may shift to less fertilizer-intensive crops like soybeans, but high prices for corn, soybeans, and wheat incentivize planting. Increased international demand for US fertilizers is noted, with market dynamics focusing on supply availability.

What percentage of a farmer's budget is expected to be spent on fertilizers this year?

• 30%

• 60%

• 40%

• 50%

Where does the US primarily source its potash for fertilizers?

• Mexico

• Russia

• Canada

• China

How do rising fertilizer costs affect consumer prices at grocery stores?

• They have no effect on consumer prices.

• They stabilize consumer prices.

• They contribute to higher food inflation costs.

• They lead to lower prices for consumers.

Which crop is most affected by fertilizer consumption?

• Wheat

• Soybeans

• Corn

• Rice

What is a potential strategy for farmers to manage higher fertilizer costs?

• Stop using fertilizers

• Increase fertilizer usage

• Shift to crops that require less fertilizer

• Reduce crop production