Lower Fertilizer Prices on the Way Next Year

December 17, 2015 02:44 PM
Lower Fertilizer Prices on the Way Next Year

Here’s a piece of good news for farmers worried about the cost of production: Fertilizer costs are expected to fall in 2016.

According to a farmdoc Daily analysis by Gary Schnitkey of the University of Illinois, December 2015 fertilizer prices are lower than last year at this time, suggesting that growers may catch a small break on this input in 2016.

Here’s where those costs stand now, based on Illinois data:

  • Anhydrous ammonia: $650 per ton, which is “the lowest price since 2008,” according to Schnitkey.
  • Diammonium phosphate (DAP): $536 per ton, which is 4.1% lower than last year.
  • Potash: $414 per ton, which is 13.6% below last year.

Based on those December numbers, it adds up to $133 per acre for fertilizer, which is 8.3% below December 2014 costs.

There are a few caveats. “As one would expect, implied fertilizer costs using December prices are not a perfect indicator of fertilizer costs in the following year. December is only one month out of the year while fertilizer is purchased in many months. Moreover, quantities can vary from those used to calculate implied costs,” Schnitkey cautions. 

What's happening with fertilizer prices in your area? Let us know in the comments. 

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