Fertilizer Woes Cloud New Crop Outlook as Farmers Mull Cutbacks
- Media Logic Radio
- Sep 25
- 4 min read
Surging costs for key crop nutrients that growers need could spur sharp cutbacks in fertilizer use.
Prices are climbing for phosphate, crucial for plant growth, amid fear that an already difficult farm economy may be poised to worsen into a full-blown crisis.
“We are definitely in a critical situation,” said National Corn Growers Association (NCGA) President Kenneth Hartman, an Illinois farmer going back five generations. "For my phosphate fertilizer they’re asking $200 more a ton than they did a year ago.”
U.S. farmers are grappling anew with sticker shock amid President Donald Trump’s tariffs that have crimped phosphate imports and higher costs for equipment, seed, chemicals and other fertilizers like nitrogen. Three years ago, in the wake of Russia’s invasion of Ukraine, crop nutrients soared to record highs, causing growers to balk and sharply reduce purchases, ultimately cooling prices. Yet unlike 2022, farmers today are facing a much lower value for their crops amid excess supply, making it more difficult to count on a profit.
“Farmers are like ‘Well, I’m not going to put fertilizer on this year,’” Hartman, who typically buys his crop nutrients in the fall, said at a recent discussion on the farm economy in Washington. A survey released by NCGA showed nearly 40% of producers plan to reduce fertilizer applications.Trump’s levies on Saudi Arabia, Jordan, and Egypt, which last year made up 86% of phosphate shipments to the U.S., according to The Fertilizer Institute, have contributed to a 36% decline in imports from April through July versus the same period a year earlier, according to TFI chief economist Veronica Nigh.“Every country we currently import product from is facing a ‘Liberation Day’ tariff other than Russia,” Nigh said. “That’s a big deal.”
Meanwhile, the overall cost to grow an acre of American corn jumped 26% from 2021 to 2022, compared with the average increase of just about 3% annually, NCGA Chief Economist Krista Swanson said. Farming expenses have largely remained relatively elevated.
Fertilizer, typically about a third of a grower’s operating expenses, has become “increasingly unaffordable,” said Bloomberg Intelligence analyst Alexis Maxwell in an interview.“ ”Phosphate is more costly on a unit basis for the farmer than it’s ever been, going back decades."
Recent New Orleans barge futures for DAP, which includes both phosphorus and nitrogen, are trading between $700 and $800 per short ton versus around $250 per ton five years ago, noted Josh Linville, vice president of fertilizer at StoneX.
A handful of countries, including Morocco, Russia, China and the U.S., control roughly 85% of the global production and export of phosphates. A big problem for the global market is that China has cut shipments to the world by about half to only allow around 4 million tons out of the country, according to Linville.
“Because China has halved its export flow, the global supply and demand is just completely messed up,” he said. “There’s not enough supply to go around.”
China, which has been working to become more self-sufficient in food production, began on-again-off-again export limits starting in the second half of 2021. The pullback has left a big hole in the market as the Asian agriculture powerhouse had accounted for about 30% of worldwide phosphate exports, according to Maxwell.
“About 40% of the world’s production of phosphate comes from China,” said Rob Clayton, senior vice president of North American Retail at Nutrien Ag Solutions, a unit of Nutrien, the world’s biggest fertilizer producer. “We’ve seen the value of phosphate pushed up by a lack of supply.”Farmers also face higher prices for nitrogen needed for corn, wheat and other major crops used for food, fuel and fiber. Around a fifth of the world’s export volumes come out of Egypt and Iran, areas under significant geopolitical risk, Clayton told Agri-Pulse in an interview in Nutrien’s hometown of Saskatoon, Saskatchewan. Another headache for American producers is a 15% U.S. tariff on nitrogen from Trinidad and Tobago, a key supplier. “A grower can ill afford that right now,” Clayton said. “We’d love to see some of those tariffs go away.”Another issue are import taxes on phosphates from top producers Russia and Morocco after Mosaic Co., the top U.S. producer of phosphates, called for a federal investigation of subsidized imports. That led to a 2021 final determination that the U.S. industry was being harmed and resulted in tariffs.
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“Since the imposition of import duties, total U.S. import volumes have declined, a shortfall that domestic producers have been unable to fully offset,” the International Food Policy Research Institute said in a blog this year. “Simultaneously, import sources have shifted to other, often more expensive, origins. Compounding these challenges, domestic phosphate production has faced disruptions, notably from hurricanes that forced temporary plant shutdowns.”Further, while the U.S. hasn’t sanctioned Russian fertilizers, there’s been recent worry that could change and spur much greater global supply chaos.
U.S. manufacturing of phosphate fertilizer has fallen. Mosaic said last month it expects improvement in its phosphate production business following an effort to boost future output that took longer than expected. The Florida company sees the global market remaining tight, with robust need in nations including India, which is trying to meet two years' worth of “pent-up demand” due to the time it takes for new capacity to come online.
“Put simply, there is not enough phosphate fertilizer available to meet demand, and we expect this dynamic to continue well into 2026 even if there is some demand deferral in America,” Mosaic CEO Bruce Bodine told analysts on an earnings call in August.
American farmers typically don’t use phosphates until after fall harvest, roughly around Thanksgiving. That means producers soon will know if there’s been a “material shift” in phosphate trade flow since early April, or “Liberation Day,” when Trump announced tariffs.
“There’s still a little bit of time but not much,” she said. " We are rapidly closing the window for imported phosphate supply.”Nutrien is expecting a big fertilizer application season this fall, Clayton said, especially given the expectation for a bumper corn harvest that will deplete the soil of important chemicals.
“I think, weather dependent, that we will get those nutrients into the soil,” he said. “But if we don’t, then there’s a potential we could struggle to get that out in the spring.”
