Why Does Fertilizer Cost So Much? 5 Reasons

It’s no secret that fertilizer is an essential piece of the puzzle for successful gardening. All plants have different needs, whether in your garden, lawn, landscaping, or agriculture. With so many different plant needs, fertilizer can turn into a considerable expense – but why does it cost so much?

Fertilizer costs are high due to the rising costs of natural gas and coal, both necessary resources for the creation of fertilizers. Additionally, fertilizer costs are affected by supply shortages and high demand worldwide. 

In this article, we’ll cover the driving forces behind rising fertilizer costs, things you should consider before purchasing fertilizer, and some inexpensive alternatives for when the price of fertilizer is just too high. 

Driving Forces Behind Rising Fertilizer Costs

Fertilizer is a resource that has always been subject to the tumultuous rise and fall of the supply and demand game. Still, the sharply rising costs of natural gas and coal have been even more so affected recently. There are numerous driving forces behind high fertilizer prices, all with their own unique challenges.

1. Rising Costs of Natural Gas and Coal

Natural gas and coal prices drive up the costs of almost everything in our world, and fertilizer is no exemption. Natural gas and coal are necessary resources for fertilizer production, so when these prices go up, they would naturally cause the cost of the products that rely on them for production to increase as well. 

In fact, an estimated 80% of the cost of producing ammonia (a chemical compound necessary for the creation of nitrogen fertilizers) is attributed to the cost of natural gas. In countries where coal is more prevalent than natural gas, there are rising prices, too, as the cost of coal has increased as well. In China, for example, some nitrogen fertilizers increased by 84% over the course of one year (2022). 

2. Supply Issues

There are a large number of factors that can create supply issues in trade. Fertilizers, and the resources needed to make fertilizer, are easily affected by these supply chain issues. Some of the main reasons we see supply shortages in this field are:

  • Global Pandemic
  • Power Outages
  • Natural Disasters
  • Political Trade Issues

Global Pandemic

The COVID-19 Pandemic created disturbances in global trade as the world adjusted to new restrictions and precautions. Because many ports were temporarily shut down, our commonly traded products were delayed in getting to their final destinations. 

With fertilizer products and resources stuck in limbo on cargo ships, there wasn’t as much readily available to the people shopping the shelves in the home and garden stores. And less availability almost always means rising prices. 

Power Outages

Plant power outages are a headache for more than just the people working there. When there are issues with big production plants, the expected amount of product cannot be released, therefore creating a low supply level.

Once these plants get back up and running, they can usually jump right back into production mode and catch up fairly quickly. However, the effects of full days of production being lost are definitely felt in the budget line of a gardener. 

Natural Disasters

Many times, when we see supply shortages, it can be linked to some form of natural disaster. Weather issues can drastically affect our ability to produce the expected volume and quality of products assigned to any factory or plant. 

For example, the Texas Freeze and Hurricane Ida in 2021 clearly affected the supply of fertilizer and the resources needed to make fertilizer. Natural gas fields were damaged, and the nitrogen supply was depleted, causing the creation of many fertilizers to be far more expensive than they otherwise would have been. 

Political Trade Issues

The cost of fertilizer is not only affected by unforeseeable world issues but also by the people who make the trade deals: politicians. Countries often use trade as a negotiating tactic to make deals and resolve conflict, meaning that change can happen at any time.

For example, if a country decides to stop exporting a particular good that another country heavily relies on, that product would drastically increase in price as its availability takes a sharp decline. 

Additionally, trade tariffs create extra taxes on particular goods, which causes the price of them to go up. Phosphates are a perfect example of this type of import tariff. When a major supplier stopped exporting phosphates, the supply was low, and there was an import tax. These two factors together mean a significant increase in the cost of fertilizers containing phosphates. 

3. Worldwide Demand

Fertilizer is in high demand all over the world. Low supply combined with high demand is the perfect recipe for a price-inflation nightmare. The United States imports over 50% of its nitrogen supplies as well as over 85% of its potash supplies. Since nitrogen, potash, and phosphates are the three most necessary pieces for creating synthetic fertilizers, these numbers show how heavily the US relies on imports for fertilizer production.

Many other countries are in a similar boat. When the need for imported resources is so high, any flux in price can be drastically affected if the need outweighs the desire to pay a reasonable price. High demand creates high prices even when the supply is high. However, prices skyrocket when the supply is low, and the demand is high. 

4. Increased Shipping Costs

Whenever you are dealing with imported resources and goods, shipping costs must be a noted factor when it comes to price. When shipping costs increase, that directly affects the cost of the product. Many people might not realize that when you purchase an item in the store, fertilizer included, you are not only paying for the product but also for whatever it costs to get that item on the shelf. 

When shipping costs increase, the product cost has to grow too. Shipment from Asia to North America drastically increased in the year 2021, causing increased prices on fertilizer and any resources imported to create nitrogen fertilizers.

5. High Crop Prices

High crop prices boost the demand for fertilizer drastically. When we see crop prices on the rise, farmers often choose to invest more in fertilizer to increase production and see more profits while the costs of their crops are high. The potential for increased profit encourages an increased use of fertilizer.

Farmers will start using more fertilizer per square yard than they usually would because increasing production will allow them to capitalize on escalated revenue before the prices dip back down.

Additionally, some farmers may choose to expand their acreage, causing the demand for fertilizer to increase as they now have far more land to cover than they did the previous year. 

When crop prices are low, farmers may use less fertilizer and keep their crops smaller to save some funds for increasing production when the potential for income increases again. 

Things To Consider Before Purchasing Fertilizer

With fertilizer prices high, there are a few things you should consider before making your purchase. 

  • How much fertilizer do you really need?
  • What type of fertilizer will meet your needs?
  • Is there an inexpensive alternative that will work for you?

Let’s consider each of these important fertilizer factors.

How Much Fertilizer Do You Really Need?

Some people have suggested that the only way to bring down the cost of fertilizer is to bring down the demand. When farmers choose to use less fertilizer by square yard, the need will go down, and there will also be some positive environmental benefits. 

Increasing the amount of fertilizer to boost production and take advantage of growing crop prices might sound advantageous in the moment, but when you really consider it, purchasing more fertilizer now will only support the continued increase in pricing.

By using only the amount of fertilizer that you really need, you are protecting fertilizer prices from skyrocketing unnecessarily. Additionally, you are improving the environment around you.

Synthetic fertilizers are known to be somewhat destructive when overused. These fertilizers can wash off the intended areas with over-watering or rainfall, leaking into delicate ecosystems and causing overgrowth or other damage that can essentially destroy the entire region. You can read more about fertilizer run-off and the exclusion of phosphorus in my other guide: Why Does Lawn Fertilizer Not Have Phosphorus?

What Type of Fertilizer Will Meet Your Needs?

The cost of the fertilizer you purchase is dependent on the type of fertilizer you choose and the ingredients within it. Synthetic fertilizers, especially those containing nitrogen, are going to be your most expensive option due to the high cost of natural gas affecting the creation of ammonia. 

Other fertilizers, however, will be less affected. Potash and phosphate need to be mined rather than created by the use of natural gas, like nitrogen. Because they do not rely so much on natural gas to be used for fertilizer, their prices are typically not inflated as much as nitrogen-based fertilizers. 

That said, potash and phosphate are both still experiencing cost increases due to low supply caused by trade issues. 

Is There an Inexpensive Alternative That Will Work for You?

Before you rush out to stock up on fertilizer for your garden, lawn, or farm, you should first consider whether there might be a less expensive alternative that would meet your needs. There are homegrown fertilizer options and completely organic alternatives to synthetic, store-bought fertilizer that could save your money and may even work better! 

Some examples of these types of alternatives are:

  • Organic compost
  • Coffee grounds
  • Wood chips
  • Mulch
  • Worm castings
  • Blood meal
  • Bone meal
  • Banana peels
  • Egg shells
  • Wood ash

Most of these fertilizing materials can be made or found around your home and do not increase in price with the ebb and flow of trade, natural gas prices, or supply and demand. 

Inexpensive Alternatives to Store-Bought Fertilizer

If an inexpensive fertilizer alternative sounds intriguing to you, do some research on what types of fertilizer will best support the unique plants in your garden or landscape. Here are the details on just a few of the most effective, all-natural fertilizer options. 

Organic Compost as Fertilizer

Made entirely from decomposed organic matter, organic compost may be the easiest, most effective way to fertilize your garden. As an added bonus, you are doing mother nature a favor and reusing old materials that may not otherwise have been granted a second life. 

Compost is made up of food waste, animal waste, and yard waste. It is combined into a compost heap where it breaks down over time, eventually creating a large sum of healthy, nutrient-rich compost that can be spread over or worked into the soil of your garden, field, or farm. 

Compost is a great way to dispose of waste while also creating a substance that is perfect for giving your plants new life, increasing the production of vegetable gardens, and safely providing gentle nutrients to more sensitive plants. 

Coffee Grounds as Fertilizer 

Nearly every household has fresh daily coffee grounds that probably get thrown out. Next time you finish with a pot of coffee, hang on to those grounds and use them to fertilize your garden. Coffee grounds are acidic, so they cannot be used on all plants, but acid-loving plants like strawberries, azaleas, rhododendrons, blueberries, and cranberries, just to name a few! 

Coffee grounds can be worked into the soil or sprinkled on top and then watered in. Plants that thrive in low pH soil will receive a nice nutrient boost from the remnants of your morning coffee!

Mulch as Fertilizer

Mulch is often used to create an appealing layer of matter above the soil and below the plant. It is organic matter that has not yet decomposed and can be found in a variety of forms. Some of the most commonly used forms are:

  • Crushed leaves
  • Tree bark
  • Wood chips
  • Recycled rubber

Although mulch does not deliver high doses of nutrients to the plants it surrounds as fertilizer does, it can, over time, deliver small amounts of nutrients – which is preferable for plants that are sensitive to sudden bursts of nutrients. Additionally, mulch does a great job of protecting root systems and insulating soil. 

Eggshells as Fertilizer

Crushed eggshells have high levels of calcium, which is a highly beneficial nutrient for most plants, as it works to strengthen the cell walls of the plant. 

Also found in eggshells are: 

  • Phosphorus
  • Potassium
  • Magnesium

These nutrients are also highly nutritious for growing plants and can improve the overall health and stability of the plant. 

The benefit of using egg shells is not only in their naturally included nutrients but also in their price tag. You are probably already buying eggs for your home, so saving the shells and using them as fertilizer won’t cost you any extra lines in your budget. With fertilizer prices so high, using eggshells is a great, inexpensive alternative! 

Banana Peels as Fertilizer

Banana peels are yet another item you would probably easily find in your home. After making a smoothie, or chopping up bananas for your oatmeal in the morning, hang on to those peels! With its known high levels of potassium and other nutrients, this is a great, inexpensive, all-natural alternative to expensive, synthetic plant fertilizers. 

To use banana peels as fertilizer, you can chop them up and place them in water to soak in the sun. Allow them about 24 hours to release all of the nutrients, and then use the water to hydrate your garden. The removed peels can then be added to your compost heap for other fertilizing needs! 

If you’d rather not soak the peels in water, you can add them directly to the soil, but be warned! Banana peels that have not yet been composted can sometimes attract hungry little critters. 

If you’d like a more in-depth guide about using banana peel fertilizer, you can read my other article here: How Often Should You Use Banana Peel Fertilizer?

Wood Ash as Fertilizer

Wood ash is an excellent resource for fertilizing your plants. This natural fertilizer is made from the ash of cleanly-burned, untreated wood. Wood ash boosts lime, potassium, and many other nutrient levels in your soil. It can be sprinkled on top of your soil or mixed in with your compost pile for some added compost nutrients. 

As an added bonus, wood ash acts as a pesticide – keeping away slugs and snails! You can read even more about the benefits of wood ash as a fertilizer in my guide on how wood ash affects soil pH: Does Wood Ash Fertilizer Lower Soil pH?

Final Thoughts

The cost of fertilizer has increased continually over the years, primarily due to increased natural gas and coal prices, rising crop prices, increased shipping costs, low supply, and high demand. Many suggest that decreased demand would lower the cost of fertilizer; however, with crop prices continually rising, it is unlikely that the demand for fertilizer will subside anytime soon. 

Fertilizer alternatives like organic, all-natural compost may become increasingly popular as synthetic fertilizers continue to rise in price. Before purchasing a high-cost fertilizer, consider your needs and your options. You might find that a less expensive choice is right for you!

Alexander Picot

Alexander Picot is the principal creator of TheGrowingLeaf.com, a website dedicated to gardening tips. Inspired by his mother’s love of gardening, Alex has a passion for taking care of plants and turning backyards into feel-good places and loves to share his experience with the rest of the world.

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