Fertilizer is one of the input costs for farmers that has stayed high in recent months. Josh Linville of StoneX says global events can have a bigger impact on fertilizer than some may realize.
“Absolutely, it’s exciting that somebody’s looking more global than just at home, because that’s what we need to do, right? We need to consider what’s happening halfway around the world. So, we’ve seen a lot of escalation when it comes to the Russian-Ukraine situation. Earlier this week, Ukraine started using U.S. produced missile, which Putin has often said that is going to be seen as a major escalation. Ukraine did that, and overnight, we saw Russia respond with another missile attack involving ICBMs. That’s a scary, scary situation.”
If the Russia and Ukraine war gets any worse, it could lead to some serious consequences in fertilizer.
“We have to start looking forward and say if this continues to spiral a lot of control, what does that mean for Russian exports? And when you look at Russia, they are incredibly important. They are either the top urea and UAN, they are the biggest exporter in the world. Anhydrous, historically, they’re the biggest exporter. They have it because they’ve lost their export ability, which went through Ukraine, historically speaking, Phosphate is the fourth-biggest. Potash is the second-biggest, and so we got to start wondering, what happens if, all of a sudden, those exports stop?”
There’s a big difference between exports stop flowing to the world or just stop for the U.S.
“If they just stop coming to the U.S., or if the U.S. starts blocking Russian fertilizer, that’s different, because they can still send it to places like Brazil and India, Central America. As long as the exports continue to flow at normal paces, the global equity doesn’t change. Yeah, our price might rise a little bit, losing that supply, but overall market doesn’t change substantially. If we get into a situation where suddenly they start slowing down, and you think about how important they are on every single one of those products that is going to impact the true equity of the marketplace, then that is going to start impacting price ideas going forward as we start thinking about spring.”