Researchers: Farming industry shows increasing resilience to fertilizer price volatility
Historical data shows farmers today are weathering spikes in fertilizer prices more effectively than producers did fifty years ago.
The farming community faced substantial challenges last year as soaring fertilizer costs took center stage. However, historical data reveals that these recent spikes did not impact crop revenues as severely as the fertilizer price increases witnessed in the 1970s. The trend highlights the resilience of modern agricultural practices and the adaptability of today’s farmers.
Comparing the recent fertilizer price spikes to those of the 1970s provides valuable context. Fifty years ago, fertilizer prices reached levels much higher than those experienced last year. This historical perspective sheds light on the ability of the farming industry to navigate through periods of elevated input costs.
As we near the end of 2023, researchers at the University of Illinois offer a glimmer of hope for farmers. Their analysis suggests that farmers will fare better this year than they did during the most recent fertilizer price spike in 2009. The University’s research even hints at a potential return to historical averages for fertilizer prices in relation to corn revenue in the upcoming year.
The current trend in retail fertilizer prices presents a mixed picture. For the second consecutive week, most retail fertilizer prices are on the decline.
According to data from DTN, 10-34-0 fertilizer is down 14 percent compared to the previous month, and potash has decreased by 8 percent. Other popular fertilizers like DAP, MAP, urea, UAN28, and UAN32 have all experienced modest declines of less than 5 percent.
However, anhydrous fertilizer has bucked the trend, coming in 9 percent above prices seen just a month ago. This divergence highlights the ongoing volatility in fertilizer markets, requiring farmers to stay nimble in their decision-making.