Global Fertilizer Shortage Reshaping Farming, Food Costs

Food prices have been a major concern for consumers over the last several years, but an emerging challenge in 2026 is adding even more pressure to grocery bills: a worldwide fertilizer shortage.

Fertilizer, comprising nitrogen, phosphorus, potassium and other essential nutrients, helps crops achieve the yields needed to feed our growing global population. When fertilizer supplies become constrained or prices rise dramatically, farmers are forced to make difficult decisions that can ultimately affect food availability and affordability. That’s exactly what we’re seeing now.

Courtesy of the American Farm Bureau Federation.

The impact of fertilizer shortages didn’t show up overnight. Instead, it has followed a chain reaction. As fertilizer prices rise, growers must either absorb the additional costs, reduce fertilizer application rates or shift to crops that require fewer inputs. In some cases, using less fertilizer can lead to lower yields, which means less food entering the marketplace. When supply tightens, prices tend to rise, and consumers are now feeling the squeeze.

Not all foods are affected equally. Fertilizer-intensive commodity crops such as corn, wheat and soybeans are often among the most vulnerable. Since these crops are used extensively in livestock feed, higher production costs can eventually ripple through the food system, affecting meat, dairy and egg prices.

Produce will also feel the effects, particularly field-grown vegetables such as lettuce, cabbage, broccoli and onions. However, the increase may be more moderate compared to some commodity crops because fertilizer represents only one component of overall production costs. Labor, transportation, water and packaging also play significant roles in determining produce prices.

This evolving situation shines a spotlight on the advantages of controlled-environment agriculture (CEA), including hydroponic container farms, greenhouses and indoor vertical farms.

Unlike conventional field agriculture, controlled-environment systems typically use nutrients much more efficiently (FarmBoxes utilize liquid nutrients). Hydroponic growing methods deliver nutrients directly to plant roots and often recycle water and nutrients throughout the production cycle. This reduces waste and allows growers to produce more food with fewer inputs.

As fertilizer prices rise, the efficiency of controlled-environment agriculture becomes even more valuable. While CEA operators are not immune to higher nutrient costs, the impact is often less severe because of their ability to precisely manage nutrient delivery and minimize losses.

Additionally, controlled-environment farms offer benefits that extend beyond fertilizer efficiency. Local production reduces transportation requirements, shortens supply chains and provides communities with a more reliable source of fresh food regardless of weather conditions or global market disruptions.

“We’re trying to reach those communities that are more vulnerable to shifts in the food system. That includes remote locations like the Alaskan tundra and islands, where weather and supply chain issues are more pronounced,” said Chris Michlewicz, vice president of public relations for FarmBox Foods.

For organizations focused on food security, community resilience or sustainable food production, fertilizer shortages serve as a reminder that the future of agriculture will depend on more than just maximizing yields. It will require building systems that can adapt to supply chain disruptions while continuing to deliver fresh, nutritious food.

As global fertilizer markets remain uncertain, controlled-environment agriculture is proving to be more than an alternative growing method. It is becoming an increasingly important tool for creating predictable, resilient and efficient food production systems in an unpredictable world.

Rising food prices influenced by several factors

What is influencing the increase in food prices and what can be done about it?

Rising food prices influenced by several factors

a wall of hydroponically grown lettuce

A confluence of global events and circumstances have some experts painting a grim picture for populations that already face food insecurity.

Recent spikes in food, fuel and fertilizer prices could lead to “destabilization, starvation and mass migration on an unprecedented scale,” said David Beasley, head of the U.N. World Food Program.

A recent U.N. analysis shows that “a record 345 million acutely hungry people are marching to the brink of starvation.” That’s a 25-percent increase from 276 million at the start of 2022, before Russia invaded Ukraine in late February. The number stood at 135 million people before the COVID-19 pandemic in early 2020, according to an ABC News article.

The war in Ukraine is having a continuing ripple effect on the global food supply. Russia and Ukraine together export 28 percent of fertilizers made from nitrogen, phosphorous and potassium, according to Morgan Stanley. The limited global supply has sent prices into the stratosphere — in some cases doubling the cost — and there are fears that high costs or the lack of availability will result in farmers using less fertilizer, leading to lower yields of commodities that are already constrained. 

In early July, the Consumer Price Index report from the Bureau of Labor Statistics said that food prices in the U.S. increased 10.4 percent from June 2021 to June 2022.

Rising costs for any critical ingredient for running a farm — water, labor, fuel or fertilizer — translate to higher food prices. And when all four hit at the same time, disruption ensues, to the detriment of consumers, especially those who were already hanging on by a thread.

In all, worldwide experts fear crop yields will drop by 10-30 percent, and developing countries will be hardest hit.

The prevalence of “undernourishment” — when food consumption is insufficient to maintain an active and healthy life — continued to rise in 2021. The U.N.-commissioned report, “The State of Food Security and Nutrition in the World,” estimates that between 702 million and 828 million people faced hunger last year.

A grain shortage stemming from the Ukraine conflict is also driving up the cost of basic foods and other commodities, and corn and wheat are not getting out to the market because the Black Sea is closed. To top it off, drought conditions are crippling agricultural operations in several regions known for high output. 

There’s a dearth of issues to navigate. But as The Shelby Report points out, crises stoke innovation. Agricultural adaptation is being employed, including the use of hydroponic container farms housed in upcycled shipping containers. The controlled-climate farms allow for uninterrupted, decentralized growing year-round and provide a stable environment to ensure reliable yields. Smart irrigation systems are being used more than ever, and data is driving decision-making at unprecedented levels in order to maximize available resources. Responses to climate change vary by location and commodity. Learn more about how the USDA is assisting food producers.