The European fertilizer crisis has widened as industrial giant YARA said record gas prices are forcing it to scale back its ammonia capacity in the region.

The energy crisis limiting fertilizer production is deepening as European producers again restrict operations due to rising prices for gas, a key raw material. More than a quarter of the region's nitrogen fertilizer production capacity is believed to have already been lost.

The cuts highlight the impact that the gas crisis in Europe is having on industrial users as well as consumers' electricity bills. Reduced fertilizer supplies also threaten to force the world's farmers to cut back on nutrients critical to growing crops, risking smaller crops as the world grapples with rising food prices.

YARA is cutting ammonia output to around 35% of capacity, with the latest cuts resulting in an overall reduction to the equivalent of 3.1 million tons of ammonia and 4 million tons of finished products across its production system in Europe. Gas is the basis for most nitrogen fertilizers, including ammonia.

“Yara will, where possible, use its global supply and production system to streamline operations and meet customer demand, including continuing to produce nitrates using imported ammonia whenever possible,” the Oslo-based company said in a statement.

Even before the latest cuts, Yara CRU Group estimated that 41% of Europe's ammonia production capacity outside of Ukraine would be shut down or run at a heavily reduced rate, based on recent announcements. According to CRU, it is currently much cheaper to import ammonia into Europe than to produce it there.

CF Industries announced on Wednesday that it would stop ammonia production at its remaining UK plant, while Grupa Azoty, Poland's largest chemical company, also cut ammonia production and Anwil, a division of oil company PKN Orlen SA, halted production.