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(Bloomberg) -- Fertilizer prices are soaring after the world’s largest nitrogen facility had to declare a force majeure.
CF Industries Holdings Inc. said on Sept. 3 that it can’t fill orders from its Donaldsonville, Louisiana, nitrogen complex, which was closed ahead of Hurricane Ida, according to a letter seen by Bloomberg. That’s stoking fears of production losses at a time when supplies are already tight.
Fertilizer prices are already high, and that’s adding to increasing costs for farmers, who are paying more for everything from land and seeds to equipment. The higher costs of production may mean more food inflation is on the way. Global fertilizer costs touched near-decade highs in recent weeks, becoming expensive enough where growers may have to curb purchases.
Prices for urea, a type of nitrogen fertilizer, in New Orleans are spiking in part due to “uncertainty surrounding the restart of CF’s Donaldsonville plant,” as well as when other plants will receive electricity, Scotiabank analyst Ben Isaacson said in a note Tuesday.
The giant Donaldsonville complex consists of 19 plants including six ammonia and five urea facilities, making nitrogen-based products for agricultural and industrial markets. The plant is located in Ascension Parish, where over 2,700 customers were still out of power as of Tuesday morning, and should have power restored later in the day, according to an update from Entergy Corp.
CF Industries did not respond to a request for an update of the status of the plant Tuesday. Ark Veterinary Clinic, just down the street from the complex, said it didn’t yet have power back.
Hurricane Ida has disrupted everything from fertilizer to crude oil production, and has destroyed key infrastructure for crop exports. About two-thirds of gas stations in New Orleans and Baton Rouge, Louisiana, were shut last week as stations were unable to get fuel and power.
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