One of the top concerns for farmers heading into the 2023 growing season is high input costs. However, one input — fertilizer — looks surprisingly less expensive than a year ago.
A warm winter in Europe and supply chain issues easing up have led to a 50% drop in natural gas prices, which is used to produce nitrogen fertilizer products. That’s taken the pressure off the global fertilizer market. One fertilizer expert says fertilizer supplies from Russia we down last year due to the Black Sea war, plus production of some products was down in China and Europe, which pushed prices to record levels. Now, that situation has flipped.
Josh Linville, vice president of fertilizer with StoneX, says: “We’re going into this year and the markets feel to a certain extent oversupplied, demand feels like it could continue to wait, hold off. Nobody is worried about logistics; it is a much calmer, more normal marketplace today than 12 months ago.”
Linville says prices for many fertilizer products in the NOLA market are already down about half verses the peak in March and April 2022.
“Phosphate prices got up to over $1,000; today they’re $600 to $650. Potash got to $800 to $900; today that price is around $400. Urea got to $900; today I believe that price is closer to $360 to $370. Depending on the product, you’re talking maybe a little less than 50% of where the high was with some of the other products a little bit over 50%.”
Linville predicts those lower prices will hold into spring planting. However, if farmers can lock in fertilizer prices against grain prices at a profit, they should pull the trigger, he says, especially since there could be logistical issues this spring with the reduced barge traffic on the Mississippi River.
