Cannabis Cultivators Brace for Fertilizer Shortage as Russian War in Ukraine Continues
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As Russia continues its invasion of Ukraine, the United States and Europe have responded with economic sanctions. These sanctions exert crucial pressure on several key Russian industries. However, the sudden halt of Russian exports to the West has also caused significant knock-on problems for the global supply chain.
With the invasion pushing up the price of natural gas, an important ingredient in fertilizer production, and sanctions ending Russian fertilizer exports, the agricultural industry has begun to warn of potential food shortages.
One often-overlooked part of the agricultural sector is the cannabis industry, perhaps due to its complicated legal status in the United States. Without easy access to fertilizer, the cannabis industry is also warning of increased production prices, lower crop yields, and likely an increased price for cannabis at the point of purchase.
Cannabis industry may miss out on agricultural assistance payments
In addition to accounting for nearly 20% of the global natural gas trade, Russia is also the world’s top exporter of fertilizer, with a fertilizer export market worth around 7 billion USD. According to Deutsche Welle, many European and central Asian countries currently rely on Russia for over 50% of their fertilizer supply. Unsurprisingly, then, the halt of Russian fertilizer exports means significant short- and medium-term disruption to agricultural industries.
“With disruptions taking place, this will inevitably lead to inflation on not only fertilizers but harvested food crops and potentially cannabis,” Huston Hoelscher, manager of the environmental sciences group and senior pest control advisor at cannabis cultivation facility design and engineering firm Urban-Gro, told Marijuana Business Daily.
“Without the access to fertilizers, this can lead to lower yields – which, in turn, will create lower-quality product as well as limited surplus,” he explained.
Also speaking to Marijuana Business Daily, Alen Nguyen, CEO and founder of the integrated supply procurement platform for cannabis companies Mainstem, said that the fertilizer shortage “is absolutely disastrous for the cannabis supply chain.”
“Sky-high fertilizer prices will have farmers worldwide scaling back its use and reducing the amount of land they’re cultivating,” Nguyen said.
In a bid to counteract this shortage, the Biden administration announced that the federal government would be providing an “initial $250 million investment in domestic fertilizer production to $500 million to lower costs and boost availability for farmers” so that US agriculture businesses can continue to secure the fertilizer they need.
But with cannabis still under federal prohibition in the United States, Nguyen expects that very little of this investment will find its way towards the cannabis industry.
“Guess who gets the short end of the stick?” Nyguen said. “The cannabis industry.”
As some prepare to ration, experts recommend examining cultivation practice
Based on his procurement software, Nguyen says that some US cannabis growers are already struggling to buy the nutrients that they need during this supply chain disruption. Others have stockpiled enough growing supplements to last the year. The coronavirus pandemic already provided motivation to shift away from small as-needed purchases. Thanks to the latest Russian sanctions, Nguyen expects that this shift will hasten further.
“I think we’re going to see the cannabis industry fully digitize its supply chain and adopt proactive procurement practices,” he said. “The greatest lessons from the last two years is that uncertainty and disruption must be anticipated.”
As procurement practices change and fertilizer and supplements become more scarce, others predict that there will also be an overhaul in how cultivation itself is managed. Speaking to Marijuana Business Daily, David Kessler, chief science officer of Billerica, predicted that cannabis cultivators may come to discover that they were overusing fertilizer to begin with.
“Overall, what we’re going to see is cultivators being more judicious with their fertilizer,” Kessler said. “You can grow healthy plants with less.”
Crop steering, where light, temperature, and other environmental factors are precisely controlled, is one practice that Kessler recommends. Using water temperature meters and electrolyte sensors to closely monitor the performance of a crop will help cultivators to identify when essential adjustments are needed and react accordingly.
“The conscientious and intentional utilization of water and fertilizer will allow you to weather fluctuations in supply chain and inputs much better,” he said.
Regenerative farming: a new ancient technique
“We’re in the ninth inning for humanity, two outs,” Doug Fine, hemp farmer, activist, and author, told Forbes. “Every farm-based enterprise has to operate the way humans always have—by treating its essential resources as vital to maintain and continually rebuild.”
Regenerative farming is the new name for a rather ancient collection of farming practices. For thousands of years, humanity thrived with no access to artificial fertilizer. And although the global population has exploded since the Industrial Revolution, for some smaller agricultural operations, a return to regenerative farming practices is appealing.
In an interview with Forbes, Manny Alvarez, a co-founder of Bird Valley Organics in Santa Cruz, California, explained its approach to regenerative farming for cannabis and hemp crops.
“Bird Valley Organics is a hügelkultur farm,” Alvarez said. “Hügelkultur is an ancient German cultivation technique that focuses on building a healthy soil ecosystem in order to grow healthier plants. We dig 78-feet trenches and we fill them with layers of local logs, straw, compost, and branches. We then construct a mound on top of the trenches and plant our crops. Over time, the layers start to decompose, providing nutrients for microbial life, and that in turn produces nutrients for the plants.”
By operating in a more closed-loop system, regenerative growers are more shielded from fluctuations in the tumultuous global supply chain.
Speaking on the topic of the global fertilizer shortage, Lauren Fortier, director of cultivation at the sustainable cannabis company Theory Wellness, told Marijuana Business Daily, “Myself and other organic and regenerative growers have seen this coming.”
Although the supply chain crisis has made some equipment for her farm more difficult or expensive to source – she lists security cameras as an example – having a largely internal production of soil inputs means that Fortier expects to be largely sheltered from the fertilizer shortage.
“All of the things that we use are either reused or genuinely grown on our farm or sourced locally,” Fortier said.