Fertilizer woes plant seeds of doubt beyond food

Scotts Miracle-Gro

08/06/2022 15:54

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    WASHINGTON, June 8 (Reuters Breakingviews) - Fertilizer
shortages due to the war in Ukraine are hitting more than just
food costs. On Wednesday lawn-care firm Scotts Miracle-Gro
 SMG.N  issued a sales and profit warning as higher commodity
costs continued to squeeze margins. It’s a warning of pain being
spread across industries. 
    A surge in fertilizer prices has shaken the global economy.
Even in January before Russia invaded Ukraine, certain costs had
more than doubled, according to the International Food Policy
Research Institute. Then it went up by nearly 20% when the war
began.
    Now fertilizer, along with fuel, make up one-third of Scotts
cost of goods sold, versus less than 20% three years ago. A late
U.S. spring and other headwinds caused Scotts to slash its
outlook for adjusted earnings per share. Its shares were down
about 10% in Wednesday morning trading. While rising food prices
are the biggest economic worry, Scotts shows how widespread
fallouts from commodities disruption can be – even for
fertilizer. (By Gina Chon)      
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 (Editing by Lauren Silva Laughlin and Amanda Gomez)
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