Fertilizer Prices Will Be Slow to Come Down in 2023

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Fertilizer and other input shortages were a big topic of conversation and headlines in 2022. Jason Troendle is an economist with The Fertilizer Institute. He says the 2022 supplies were a little lower than normal but maybe weren’t quite that bad.

“When we look at things on a U.S. basis, we actually had the second-highest total supply of nitrogen over the last eight years. We were down a little bit in terms of phosphate, and we were basically at the five-year average for potash imports. So, although there was maybe quite a bit of noise around there, I think supplies ended up being pretty good last year, and we anticipate that moving into this year.”

Some of the problems last year may have had to do with misunderstandings between producers and retailers.

“The grower would go to their retailer in December and say, ‘Hey, can I purchase my ammonia for April 20 delivery,’ and the retailer would say no, and sometimes that was interpreted as the product wasn’t available. And really, what it was is with the prices being so volatile, the retailer wasn’t willing necessarily to price something out that far in advance. So, I think we may see some of that challenge again this year, just in terms of retailers and farmers trying to mitigate risk and not necessarily wanting to put something on the books with as volatile as the market is.”

He says The Fertilizer Institute doesn’t see the availability of inputs as a problem this year. Price, on the other hand, is a different story.

“At this point in time, we don’t see or foresee any widespread shortages across the U.S. in terms of availability of fertilizer. Prices, of course, may be higher than what growers would like to pay for them, but availability, we don’t think, will be a major issue.”

There has been a little softening in input prices, but they aren’t coming down quickly.

“There’s a phrase that says things go up quickly and take a lot longer for them to come back down. But I think it’s good news is even as we’re going into the spring here, we have seen some softening in prices. I think both in terms of on the potash side and the phosphate side, we’ve seen things have been coming off for quite some time now, slowly trickling downwards. And then, even on the nitrogen side, we’ve seen some downward pressure over the last month or two here.”

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