NASHVILLE, TENN. (RFD NEWS) — Retail fertilizer prices are mostly moving lower to start the year, but one key product continues to climb, keeping cost concerns front and center for farmers. According to DTN, prices for seven of eight common fertilizers were slightly lower during the third week of January. Products seeing declines include DAP, MAP, potash, anhydrous ammonia, and several UAN blends.
Urea was the exception, averaging $574 per ton, which is 17 percent higher than this time last year. DTN notes that while several products have eased recently, all eight major fertilizer types remain more expensive than a year ago.
Urea is not the only fertilizer drawing attention. Analysts warn that potash prices could face even greater risk if global trade tensions escalate.
“Not only could it have an impact on potash, but it could also have a major impact on potash,” Linville said. “So when you look at it, the U.S. is highly, highly reliant on imports to meet our potash needs. We don’t produce nearly as much as what we consume. And when you look at the breakout of it, about 10% of that still comes from Russia. And yes, we still trade with Russia. So they’re still one of our bigger fertilizer suppliers. So 10% for them; 88% of our Canadian potash imports come from Canada. And again, it’s why situation tariffs don’t work on commodity markets as a lot of politicians think. They will sit there and say, “We told you the Canadian firm. Yes, they sent us a check.” The tariffs weren’t, and they are absolutely right in what they’re saying. The problem is that the Canadian potash manufacturer and exporter will say this is their price. I’m not changing it. The tariff rate you’re going to pay that as well. So the government’s right. If that were to go through, yes, they will get the money from the Canadian firm, but they’ll take it from the US farmer’s pocket to pay for that rate.”
Meanwhile, new government data shows ethanol production and inventories both declined last week.
Ethanol output averaged about 1.1 million barrels per day for the week ending January 23, slightly lower than the previous week. Midwest production also dipped, though the region remains the nation’s largest ethanol producer. The Gulf Coast was the only region to post an increase.
Ethanol stocks fell to 25.4 million barrels, adding to broader market uncertainty.
As farmers navigate volatility at home, growers around the world are facing similar pressures. Markets analyst Jeremy Zwinger says meetings with producers in Southeast Asia reveal many of the same challenges U.S. farmers face—often without the benefit of a safety net.
“A lot of the same issues that we’re facing — You think, oh, our issues are different. It’s the same issue,” Zwinger said. “You know, growers are suffering throughout the world. And these lower prices, and a lot of them don’t have the safety net that the US has. You know, the growers do suffer, of course, in the US, but we do. We do our best to fill on that, fill on that the balance. But there are growers who are going out of business, having to sell their land, having their seller land, and being leased back to them. You know, the issue is in a lot of countries without a safety net, without subsidies, it is who holds the supply that is really the question.”
Zwinger notes that in many countries, farmers lack subsidies or income protection programs, forcing some to sell land or lease it back just to stay in operation. Without safety nets, producers in those regions are often at a significant disadvantage.
Economists are also closely watching how policy decisions in Washington could influence markets moving forward. Analysts at AgResource say deferred futures for corn, soybeans, and wheat suggest markets are operating near break-even levels, not at prices that would encourage expanded production.
“As we look out in the next three years for corn, soybean, and wheat producers, the markets are all at the same price in deced corn for 27, 28, 29, soybeans 27, 28, and 29, and the same on wheat,” Zwinger said. “So the market’s at break even for the American farmer, not at a premium that’s buying more acreage. So normally these kinds of relationships are not what we see in deferred futures. So when I say the market knows, I mean it knows we are not trying to buy more supply. It’s looking at Washington to maybe do something in policy to get us in a different spot in demand that will help out the American farmer.”
AgResource’s Dan Basse urges farmers to focus on securing partial profits now, rather than waiting for a major rally. He says layering in sales—even modest margins—can help protect operations, especially when combined with programs such as PLC payments or recent government assistance.
“American farmers need to think about selling crop,” Bosse explained. “If you’re making 5 or 10% on a deferred futures relative to selling your crop, you need to do some of that. You know, 5, 10, 15, 20, 50, I don’t care what it is, but sell and defend so that, you know, if you add together PLC payments, government ad hoc payments like the bridge law that is now going out, you put them all together and you’re going to say, well, that wasn’t a bad year and I’m there to take the neighbor’s land who’s not doing that. So that’s the message I want to leave with these brokers and, of course, listeners going forward.”
Basse adds that taking proactive steps today can help farmers remain viable through challenging conditions and position themselves for stronger opportunities when markets improve.
