Fertilizer markets are currently facing renewed volatility, with anhydrous ammonia prices drawing close attention from the agricultural sector. While recent geopolitical tensions are a significant factor, market analysts point out that the upward trend in prices began earlier. Gary Schnitkey, a University of Illinois Agricultural Economist, provided context on the recent price movements.
‘Nitrogen prices or anhydrous ammonia were edging up before the conflict, so we saw those rising, and we still don’t, fortunately, have those at the $1,200 level like the previous conflict. And by the way, the previous conflict, we were seeing nitrogen prices rise because of Hurricane Ida, well before the Ukraine-Russia event happened.”
Forecasts suggest farmers should prepare for continued high input costs. Depending on how global events unfold, premium pricing may persist through the year. Economist Nick Paulson outlines the projections for anhydrous ammonia prices this fall. The farmdoc team in using $860 a ton.
“And that $860 number forecast that you see there, I think we talked about that in the article. I don’t want to say that’s a best-case scenario, but I think there’s even a pretty good chance that we’d see premiums above that, given what we saw in the two years following that Russia-Ukraine crisis. We did see some premiums above what you would maybe expect, given where corn and natural gas prices were, which is what this model uses to forecast.”
Paulson is referencing a model created by his colleague at the University of Illinois, Gary Schnitkey. It predicts anhydrous ammonia pricing. Today, the model projects that fall fertilizer costs complicate what is already a difficult farm economy. Schnitkey notes that sustained high nitrogen prices will heavily impact crop profitability this fall and going into the 2027 growing season.
“That’s going to make a difficult decision environment because many farmers often price their ingredients then, and we’ll see where prices are at that point in time. But, you know, a continuation of current prices would make the economics of growing corn in particular a bit more difficult.”
Market conditions remain a primary focus as producers prepare to navigate fertilizer purchases for this spring and next fall.