Looking at the current super cycle in fertilizer price climbs, Josh Linville vice presidnet of fertilizer at StoneX says you have to go beyond just the Trump administration’s tariff talk to find the root cause.
“It has created a tremendous amount of commotion without a lot of impact,” he says.
As he explains, the global nature of the fertilizer industry is prime to be disrupted by major shifts in trade. And the tariff developments have dogpiled on other factors. There are two examples he’ll point to:
1. Potash
The U.S. sources 85 to 90% of its potash from Canada. And with the carve out for potash in the current Trump administration’s tariff plan, there’s been no financial impact to the market. But the trade dynamics have had an effect.
“we’ve spent a tremendous amount of time thinking about it, talking about it, worrying about it,” he says. “But it’s never actually done anything to the marketplace. But the one thing it has done has been more the emotional side of it. It’s allowed those fundamental factors that were kind of lying in wait, not able to kind of get their own traction, so when we start started to pour on the worry of the tariff situation, that’s what finally drove these prices up.”
And he references how from the beginning of the year, potash prices are up 25%.
2. UAN and Urea
“UAN is easily the most important topic right now,” he says. “That is because it is no longer a price story—it’s a ‘can you even find it supply story.’”
Linville says it’s an issue that has been developing for weeks through most of April and into May. And now, most distributors and retailers can’t find UAN that will ship before June.
“It’s gotten to the point today where the supply side of the market is basically saying, ‘Hey, we’ve got some tons for June shipment earmarked for you, just based on what you normally do. You need to price these? Because if you don’t, they’re gonna disappear.’”
For example, if a UAN vessel from the Middle East was booked right now, it wouldn’t arrive to the U.S. until June, and then wouldn’t arrive to most warehouses until late June or early July—too late for the 2025 application seasons.
“So we’re on an island,” he says.
The easiest switch from UAN is to urea for sidedress, but with increased demand, urea prices have climbed. Therefore, Linville says it’s possible more applicators and farmers will consider anhydrous ammonia in larger volumes for this season’s application.
“Urea prices aree up over a hundred dollars a ton over the last couple of weeks. So the nitrogen sector in general has been incredibly bullish with all of this demand and lack of supply,” he says.
What can past super cycles teach us?
Linville looks to 2008—the first year we saw such a super cycle in the fertilizer market where prices spiked higher for across products. Then in 2012, a similar spike occurred followed by 2021 into 2022 with another big spike.
“There’s always price volatility,” he says. “But we’ve had three previous cycles really stand out that tower over the rest of the years.”
Compared to his perspective this past winter, he says he’s surprised by how tight UAN supplies become.
“At Top Producer Summit, I talked about UAN, and how we had lower starting inventories along with fall production issues. But what we didn’t factor in at that time was we had some very, very cold temperatures that impacted production,” he says. “We expected some tightness, but not like this.”
Today, he says there’s no silver bullet for the current UAN supply. Some shifting to urea will help. Some shifting to anhydrous will help.
“But as I see it today, I don’t see what is going to save us in the next 15 to 30 day period,” he says.
Beyond this spring application season, Linville says the groundwork for how the fall season and next year’s spring season is being set now.
“We’ve got half a year before we get to the fall application period for phosphate, potash and anhydrous. We’ve got nearly a year until next spring for urea again. So a lot of these things that we’re talking about we have to keep in mind. We’ve got a lot of time for these markets shift, and they change every single day,” he says.
