A closer look at fertilizer prices

If you are looking at input costs for your 2026 crops, you are probably wondering why so many of them remain stubbornly high—especially when crop prices have remained relatively low.

“The bottom line is that farmers input costs are higher than they’ve ever been and prices we’re receiving for our commodities are as low as they’ve been,” Mark Mueller, president of the Iowa Corn Growers Association, noted in comments to the Senate Judiciary Committee. “We can’t sustain this.” 

U.S. Sen. Chuck Grassley, R-IA, who farms and also chairs the Senate Judiciary Committee and the Senate’s only grain farmer, recently led a committee hearing to look at how market consolidation and other factors could impact input costs. The hearing also touched on the high cost of fertilizer and efforts to fill in reporting gaps after the Obama administration discontinued annual reports on the fertilizer industry in 2014.

Grassley reintroduced his bipartisan Fertilizer Research Act, which would require the secretary of agriculture to study the fertilizer industry and factors driving pricing.

Corey Rosenbusch, president and CEO of the Fertilizer Institute, testified during that hearing and also spoke about the trends on Open Mic. He says nutrient prices have gone from record lows to historic highs in just a short time and that most of the jump is out of his industry’s control.

A “roller coaster is a great way to describe it,” he added while describing the cyclical nature of the business, which makes it hard to plan for purchases. “It’s not good for anybody in the fertilizer industry either, including the grower.”

Reliant on imports and global supplies

In his written testimony, Rosenbusch pointed out that the essential components of most fertilizers are nitrogen (N), phosphate (P), and potash (K). “While there are many similarities between the three primary fertilizer macronutrients, there are also distinct differences in production, supply, use, and other conditions of competition,” he noted.

These include:

– Nitrogen fertilizers are manufactured products, reliant on natural gas as the primary feedstock and are produced in more than 60 countries by more than 100 producers. The United States is the fourth largest nitrogen producing nation.

– The U.S. is also a large producer of phosphate, which is mined from geological deposits. There are 30 countries that produce phosphate fertilizers (MAP, DAP and TSP), but the top five countries account for over 80% of production. The top phosphate-producing countries are China (43%), Morocco (13%), Russia (9%), Saudi Arabia (8%), and the U.S. (8%).

– While the U.S. has some domestic production of potash, it imported most of its domestic potash supply in 2024, as it has for decades. Only 15 countries produce potash, which is mined from geologic deposits, but Canada (33%), Russia (19%) and Belarus (15%) are the dominant producers. Unlike the nitrogen and processed phosphate markets, the top exporting nations closely follow the shares of global production.

Compared to the rest of the globe, Rosenbusch said the U.S. represents only 7% of total fertilizer production.

“When we look at how abundant our crops are, and we just have to assume that we must be equally as dominant on the production fertilizer side. And the reality is we’re not. We’re a net importer.”

When looking at fertilizer prices, Rosenbusch said, “You have to think about how foreign governments may be manipulating their own production and policy to affect global food security and food production.”

For example, China produces about one-third of the world’s nitrogen and 40% of the global phosphates. If they would limit exports for their own farmers or maybe for their own lithium phosphate batteries that we’re producing for the electric vehicle movement, that impacts the price the farmer pays here.

Russia is the largest fertilizer exporter in the world (about 16% of global supply), but Rosenbusch says few people know who the second largest urea exporter in the world. The answer is Iran.

“It shocks everyone, because you don’t really think about Iran’s participation in agriculture, but when those nuclear facilities got bombed, it affected their nitrogen production. So, that took 11% of global nitrogen off the marketplace.”

Foreign policy influence

Rosenbusch said the war between Russia and Ukraine has also had an impact on markets.

Russia is the biggest global supplier of fertilizers and that supply chain was significantly impacted at the onset of the war mainly because of sanctions imposed by several nations.

“Russia also restricted Europe’s natural gas supply, which Europeans relied on for their fertilizer production. This resulted in approximately 70% of European nitrogen fertilizer production shutting down in 2022 due to high natural gas costs. While some countries and regions, particularly, Canada, the European Union and the UK, have also put tariffs on fertilizer imports; Russian fertilizer products enter the United States duty-free,” he noted in his written testimony.

The Fertilizer Institute recently released a plan for strengthening the domestic supply of fertilizers. This includes recommendations such as:

• Appointment of a full-time U.S. Department of Agriculture fertilizer economist to monitor market dynamics, improve transparency, and provide accurate, timely information to farmers and policymakers.

• Advancement of a national policy to expand domestic fertilizer production, led by the secretary of agriculture and coordinated across federal agencies.

• Streamlining of federal permitting and regulatory reviews to accelerate construction and modernization of fertilizer plants, mines, and infrastructure.

• Including phosphate and potash on the Final Critical Minerals List to improve supply security and permitting efficiency.

Editor’s note: Sara Wyant is publisher of Agri-Pulse Communications, Inc., www.Agri-Pulse.com.