By Emmy Powell
Communications Specialist
Over the last two years, farmers and ranchers have experienced drought, supply chain issues and inflation.
Fertilizer was one of the agricultural inputs that increased significantly in price and was plagued by supply chain issues. In fact, fertilizer prices more than doubled between 2021 and 2022 due to price hikes caused by the war in Ukraine, a limited supply of the relevant minerals, high energy costs, high global demand, reliance on imports and a lack of competition in the fertilizer industry. But the fertilizer market has seen improved prices and supply this year.
Corey Rosenbusch, president and chief executive officer of The Fertilizer Institute, told the Texas Farm Bureau Radio Network the fertilizer market has been softening the last few months.
“I think farmers are kind of waiting and seeing what happens with that price before they make a commitment. We’ve seen a little bit of a bounce back from some of those January and February declines,” he said.
Although the fertilizer supply is adequate, the supply chain could create challenges for growers.
“With some of that wait and see approach, it’s going to definitely create a little bit of disruption in terms of forward supply and our distributors getting that product in the right place for when the demand does come,” he said.
He noted there are high commodity prices, a high number of planted acres and a high demand for fertilizer.
Transportation is a key aspect of fertilizer availability.
The Fertilizer Institute noted that every ton of fertilizer needs two to three modes of transportation, and over 50% of all fertilizer travels by rail at some point in the transportation chain.
At the U.S. Department of Agriculture’s (USDA) Agricultural Outlook Forum earlier this year, a representative for the International Fertilizer Association said the world fertilizer market is rebounding but still faces challenges.
Many say there is a shortage of fertilizer and that prices are at record highs, but Laura Cross, director of Market Intelligence for the International Fertilizer Association, noted both are not true.
“Global fertilizer production is expected to increase in 2023 with urea capacity up 2% and phosphorus production 7% higher,” Cross said during the forum. “Potash production is expected to fall about 14%, but it would only be about a 5% drop compared to 2019.”
USDA is also investing $29 million to expand domestic fertilizer capacity.
The grants in the first round of funding announced in mid-March focus on projects that can come online in the near term. Independent businesses that can increase production of American-made fertilizer received the grants. USDA officials said the grants will help spur competition, give U.S. Farmers more choices and fair prices and reduce dependence e on unreliable foreign sources.
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