A gauge of North American fertilizer prices soared to a record high, driving up costs for farmers and threatening to worsen food inflation.

The Green Markets North America Fertilizer Price Index rose 7.9 per cent to US$996.32 per short ton, soaring past its 2008 peak to set a new benchmark since the index began in January 2002.

The fertilizer market has been hit hard this year due to extreme weather, plant shutdowns, sanctions and rising energy costs in Europe and China, pushing prices past levels that traders and farmers hadn’t seen since the global financial crisis.

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The energy squeeze in Europe and Asia has created a critical situation for the fertilizer industry, according to the biggest manufacturer in Hungary. Companies such as CF Industries Holdings Inc. and Yara International ASA have had to shut plants or reduce production as prices for natural gas, the main feedstock for most nitrogen fertilizer, have surged. In India, the government has directed producers to refrain from raising prices.

The price spike of the crop nutrients deemed vital for producing enough food to supply a growing global population is stoking concerns of more inflation when many people still struggle to feed their families due to job losses and other lingering economic impacts from the pandemic. Expensive fertilizer could push U.S. corn farmers’ cost of production 16 per cent higher, according to Bloomberg’s Green Markets.