The world could run into an “extremely serious” food crisis…
All thanks to skyrocketing fertilizer prices.
In fact, thanks to Russia’s invasion of Ukraine, fertilizer prices are up 300% year over year.
“Russia is a key global player in natural gas, a major input to fertilizer production. Higher gas prices, and supply cuts, will further drive fertilizer prices higher. Russia is one of the biggest exporters of the three major groups of fertilizers (nitrogen, phosphorus and potassium). Physical supply cuts could further inflate fertilizer prices,” says MSN.com.
Far worse, as noted by Fox News:
Farmer Ben Neal says, “We’re getting hit on every front on every expense possible, from fertilizer to fuel to labor insurance, everything in between — our packing supplies. I think that that will soon be reflected at the grocery stores. On top of what we’re already seeing, these fertilizer price increases haven’t really affected the grocery store prices yet. They will start coming this summer.”
Farmer Ben Riensche said, “Soaring fertilizer prices are likely to bring spiked food prices. If you’re upset that gas is up a dollar or two a gallon, wait until your grocery bill is up $1,000.00 a month, and it might not just manifest itself in terms of price. It could be quantity as well. Empty Shelf syndrome may be starting.”
As this unfolds, where should we invest?
While you can always buy fertilizer stocks, like Nutrien (NTR), CF Industries (CF), The Mosaic Company (MOS), and Intrepid Potash (IPI), another way is with an ETF, such as MOO, or the VanEck Vectors Agribusiness ETF.
With an expense ratio of 0.55%, the ETF holds positions in Nutrien Ltd., Archer Daniels Midland, The Mosaic Company, Bunge Ltd., and Yara International to name a few.
With fertilizer supplies only getting tighter, related stocks could see higher highs.