Last week, which ended October 12, fertilizer affordability was unchanged week-over-week. It has been high since January 2016.
The Fertilizer Affordability Index, as you can see in the above chart, was unchanged at 0.85x but fell from the peak of 0.92x in the week ended September 14. The index is issued by Mosiac (MOS), which set it at 1.0x in the base year of 2005. A level below 1.0x in the current month indicates that fertilizers are affordable compared to the base year. However, when we compare it to the same week a year ago when it was 0.67x, it’s clear that fertilizer affordability has declined over the year.
The index is calculated by taking the fertilizer price index over the crop index. So changes in crop prices also impact how the fertilizer affordability index moves. The run-up in recent months has largely been driven by an increase in fertilizer prices. To put it in perspective, the fertilizer price index year-over-year increased 32%, while the crop price index rose 3.7%.
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