Uncertainty the trend for fertilizer into 2023
Fertilizer prices soared in the spring, but despite concerns about supply, the product will likely not have many availability issues in 2022. However, farmers will continue paying higher prices for their product this winter and spring.
“I don’t think prices will go up massively,” said David Elser, senior vice president of Nutrien Ag Solutions in North America. “I don’t see them falling off in a big way either. There has been some downward pressure in things like glyphosate, but it’s largely supply and demand dependent.”
Fertilizer price peaked in May, as the Russian Ukraine invasion cast uncertainty on supply. Since that point, prices have slowly declined, but most fertilizers are priced significantly higher than a year ago. Urea is trading at $870 as of Sept. 15, down from its April 20 peak of $1,050. While a decline is good to see, it still sits $400 (85.11%) above the same date in 2021.
Urea Ammonium Nitrate (UAN) sits at $682.50 as of Sept. 15, 116% above the same date last year.
Supply chain concerns have been the focus for Elser and Nutrien, he said. They hope to learn from the recent supply chain issues to help simplify the process. That would create fewer places for the chain to slow down and therefore lower prices.
This year may not be when results come, however. He said products should be more available for farmers this offseason, but high prices are often out of their control.
“We did see price escalation, primarily on the back of supply and demand,” Elser said. “Farmers last year were nervous about crop protection products and demand started to drive prices higher as supply tightened up.”
Andrew Feucht, agronomist with Precision Planting, said producers that are having price or supply concerns may want to consider going with smaller doses throughout the offseason and into the 2023 growing season. Spreading out those fertilizer applications may also benefit the crop.
“Cost is usually the biggest factor,” Feucht said. “Sometimes putting fertilizer on multiple times a year is misconstrued as added cost, but the soil can only handle so much added fertilizer at a time.”
The concerns of spring applications has Oskaloosa, Iowa, farmer Jared Jensen ensuring he is t
hinking ahead on supply, even into next year’s offseason.
“If there are plant shutdowns, it all feeds into the production of fertilizer,” he said. “I found some good opportunities to get fertilizer on the books and took it, not just for the fall but in 2023.”
The market seems to have adjusted well to the ongoing pressures to supply, according to the latest Rabobank agribusiness review. The company said Russian potash and phosphate products “appear to be flowing out more fluidly,” which is good news for farmers in North America.
However, there is a lot of uncertainty moving forward.
“We see a healthier supply of fertilizers than last year,” the company said. “If you are willing to pay, the product is available. The door is open for volatility if deflationary trends persist.”
