COMP NEWS – High rates of inflation are affecting the agriculture industry through higher input costs. Supply chain disruptions combined with Russia’s ongoing war with Ukraine have taken a toll on the margins of many farmers, globally.

That’s the problem for Eddie Smith, who has been growing mangoes in Australia for 16 years. He estimates his costs have about doubled in that time. To mitigate the squeeze over the years, he’s taken steps like miniaturizing his trees and reducing diesel consumption. But the current, dizzying surge in crude oil is having a pincer-like effect, and for the first time ever, he’s considering winding down the business.

These increased costs are ultimately passed on to consumers, as global food costs are up more than 40% from two years ago.

The timing couldn’t be worse. The world was already contending with rising hunger after the pandemic’s blow and droughts that parched crops in key growing regions. Global food costs jumped to a record in February and are up about 40% from two years ago

Things are so dire that the planet could be facing a “tipping point” when it comes to long-term stability for global food supplies, according to Beth Bechdol, deputy director-general of the United Nations’ Food and Agriculture Organization.

The price of fertilizes has also risen dramatically, as Russia is the second most industrious producer of fertilizer in the world.

Prices for fertilizers, used to grow practically all crops, have also risen dramatically in the past year. A crunch for natural gas supply, elevated freight rates, tariffs, extreme weather and sanctions on key producer Belarus all contributed to the rally. And now Russia, the biggest exporter of urea and No. 2 for potash, is seeking to end fertilizer exports, threatening a global shortage. The Green Markets North American Fertilizer Price Index has doubled in the last 12 months to reach a record.

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