URBANA, ILL. (RFD NEWS) — Fertilizer prices are beginning to cool. The latest numbers show notable declines, but all major fertilizer types remain higher than last year.
Analysts at DTN say urea is down 5 percent. Despite the drop, it remains nearly 25 percent higher compared to this time last year. UAN 32 also saw a weekly decline, but fell less than 5 percent.
On the year, anhydrous ammonia has seen the largest price swing, up 44 percent. Potash has seen the smallest increase, gaining 4 percent from last spring.
Lawmakers Work to Boost Domestic Fertilizer Production
Input costs like fertilizer are top of mind for farm-state lawmakers. During a call with reporters this week, Senator Chuck Grassley (R-IA), a member of the House Ag Committee, said he wants to see more transparency from the fertilizer industry.
“The problem is we don’t know why urea prices fell and what role the conflict in the Middle East played, but it was an excuse to raise urea prices 49% almost immediately after the war started. I think this is just another example of why we need more transparency of fertilizer prices,” Grassley said.
Agriculture Secretary Brooke Rollins told RFD News that USDA is doubling down on reshoring fertilizer production.
“But what the Strait of Hormuz closure has shined a light on for us is how much we had off-shored our fertilizer in the last couple of decades,” Rollins told RFD News in an exclusive interview. “Now, more than half of the fertilizer our farmers and ranchers use in this country, we bring in from other countries, and a significant amount of it from China, from Russia, from countries that are not really our friends. And so, this concept of what do we need to do to change that.”
Rollins’ interview was part of a Rural Town Hall presented by the Western Caucus Foundation. The full hour-long interview and more interviews with U.S. lawmakers and members of the Western Caucus will air July 1 on RFD-TV.
Industry Consolidation Weighs on Farm Margins
Fertilizer prices have been highly volatile this year due to the war in Iran. However, agricultural economists at the University of Illinois say industry consolidation may be a larger factor behind higher prices.
“Since 2000, there was a decrease in the total number of firms, but also in operating plants,” explained Henrique Monaco. “When it comes to who has the top ammonia production capacity in the U.S., CF Industries and Nutrien would be the top two. Those together here will account for roughly 55-60 percent. The top four companies account for 70% of ammonia production capacity. That is not necessarily market share, but it is one indicative here.”
Consolidation is not exclusive to the fertilizer industry. Monaco said companies producing seeds, machinery, and crop protection products also hold significant market shares in their respective sectors.
High input costs remain a major concern for farmers, and a recent survey suggests many producers are increasingly worried about consolidation within the agricultural supply chain.
Dr. Gary Schnitkey with the University of Illinois joined us on Wednesday’s Market Day Report to discuss the findings of a recent farmer survey examining attitudes toward input costs, industry consolidation, and customer service.
In his interview with RFD News, Schnitkey provided some background on the survey and outlined the topics covered, including farmers’ perspectives on agricultural input suppliers and the broader marketplace.
Dialing in on fertilizer, specifically, he discussed concerns about consolidation among agricultural retailers and manufacturers and how producers believe increased concentration in the industry could affect pricing and competition.
Schnitkey also addressed how farmers view the potential impact of consolidation on customer service, including concerns about access, responsiveness, and supplier support.
Finally, he highlighted what the results suggest about producer sentiment regarding the future of agricultural input markets.
