Operating costs keep getting higher while commodity prices fall at the same time. Rabobank says this combination has led to a squeeze on farmers’ operating margins, which are now below the average of the past two years, making farmers more cautious about investing in their farms.
“Despite these headwinds, the fertilizer sector is showing resilience,” says Bruno Fonseca, senior analyst of farm inputs at Rabobank. “Geopolitical factors, among other issues, could present further obstacles, yet growth in fertilizer use is anticipated to persist.”
There are certain fertilizers vulnerable to a decline in demand. Nitrogen fertilizer prices are on a downward trajectory, influenced by diminished demand and falling natural gas prices. The phosphate market experienced a price surge early in 2024 when China shifted its focus to domestic needs, curtailing global exports. Potash is witnessing a robust supply due to increased exports from Belarus and Russia, leading to lower prices.
