Trade

Global agricultural markets have been in a constant state of uproar over the past five years. Trade wars between major trading nations such as China, the United States, and Australia, supply chain disruptions due to the COVID-19 pandemic, Russia’s war in Ukraine, crisis in the Middle East, and export restrictions in many countries have diverted supplies, altered trading patterns, and increased price volatility, which often makes markets less efficient and more costly. 

The FAO Food Price Index declined by 1.6 percent from December. While the Index was 6.2 percent higher than its January 2024 level, it remains 22 percent below its peak of March 2022.

Fertilizer use plays an important role in increasing agricultural production and ensuring food availability and economic accessibility: two critical components of overall food security. When global fertilizer prices skyrocketed in 2021-2022, those spikes brought with them concerns about drastically reduced fertilizer application and subsequent negative impacts on food production, prices, and food security.

Donald Trump’s return to the White House likely also signals the return of the unilateral trade policies that characterized his first term and precipitated trade wars between the United States and many of its trading partners, most notably China. As a candidate, the president-elect threatened a number of adverse trade actions including raising tariffs on all imports by 10%-20%. He has warned a number of specific countries as well—suggesting he would consider 60% tariffs on China and 25% tariffs on Canada and Mexico.

In 2024, the FAO Food Price Index was 2.1 percent lower than its 2023 average. While the December 2024 Index was higher than its December 2023 value, it also remained well below the peak prices seen in March 2022.