By Emmy Powell
Communications Specialist

Elevated fertilizer prices could remain a challenge for farmers for several more crop years as global supply disruptions continue to pressure the market.

A recent CoBank report noted fertilizer markets are unlikely to quickly return to conditions seen before the Iran war. North Dakota State University projections cited in the report show fertilizer prices rising before reaching a prolonged plateau above pre-war levels through 2028.

Those higher costs add another challenge to already tight farm margins and leave farmers with little room to absorb additional production expenses.

“Farmers continue to face challenges as fertilizer costs remain above historical levels,” said Brant Wilbourn, TFB associate director of Commodity and Regulatory Activities. “They have become more efficient with fertilizer use, but farmers still need reliable access to crop nutrients to maintain yields and remain profitable. Continued supply disruptions and uncertainty in global markets will make that challenge even greater in the years ahead.”

Unlike the fertilizer price spike that followed Russia’s invasion of Ukraine in 2022, today’s market is dealing with damaged production facilities that could take significant time and resources to restart.

An estimated 31 ammonia plants in the Middle East have been affected by the conflict or shut down production, and disruptions in other countries are adding to global fertilizer supply constraints.

The Middle East plays a critical role in global fertilizer markets by supplying more than 60 million tons of fertilizer products and raw materials annually. About 45 million tons move through the Strait of Hormuz.

The region also accounts for half of globally traded sulfur and more than 30% of global urea exports, according to CoBank.

Phosphate fertilizers, particularly diammonium phosphate (DAP) and monoammonium phosphate (MAP), face the greatest supply risks.

Global phosphate supplies were already limited before the war. Higher prices for sulfur and ammonia, which are major inputs in phosphate production, have increased production costs. Restrictions on phosphate exports from China have further tightened supplies.

Farmers have adjusted fertilizer use in recent years as costs increased.

Instead of cutting fertilizer use, many farmers are relying on soil testing, variable-rate technology and other nutrient management practices to maximize returns, the report said.

Nitrogen remains a priority because reducing applications can quickly impact yields. Farmers have reduced phosphate and potash applications by about 10% to 15% in recent years. While this strategy can lower short-term costs, continued reductions could begin affecting crop yields within two to three years.

Affordability also remains a concern. Commodity prices have not increased with fertilizer costs as they did during the 2022 fertilizer price spike, and that leaves farmers with less room to absorb higher input expenses.

The report noted market recovery depends heavily on geopolitical stabilization in the Middle East, improved access to raw materials, lower sulfur prices and potential changes in global trade policies.

Until those pressures ease, farmers are likely to continue facing higher fertilizer costs and uncertainty heading into future growing seasons.