This is not the time of year to run out of fertilizer. But the current problems in the Middle East could have a major impact on fertilizer supplies and prices. Louisiana State University AgCenter Economist Dr. Michael Deliberto.
“Now, Iran holds some of the world’s largest natural gas reserves, and natural gas is the key feedstock used to produce ammonia, which is the foundational input for most nitrogen fertilizer. And urea accounts for about 46% nitrogen, mainly — it’s the world’s most widely used nitrogen fertilizer. So, the Middle East is an important hub for nitrogen fertilizer. Countries that are exposed to the disruption in that region account for about 49% of global urea exports and about 30% of global ammonia exports, reflecting the concentration of fertilizer production and export capacity that we’re seeing in the Persian Gulf region right now.”
The Fertilizer Institute said 65 percent of U.S. farmers get most of their fertilizer needs met by domestic sources. But Deliberto said the problems arise with the other 35 percent.
“The rest is going to come from imports, which have been increasing due to the global uncertainty that we’re seeing right now. But fertilizer markets are very much globally integrated, so supply disruptions in one region of the world can influence prices and availability elsewhere. So, the U.S. relies on both domestic production and imports to meet fertilizer demand.
“Now, the import exposure that our U.S. market has is going to vary by nutrients. Roughly 97% of potassium is imported. Eighteen percent of nitrogen is imported, and we import about 13% of our phosphate, so that import exposure increases sensitivity to these trade disruptions, particularly during seasonal demand peak.”