A new report from CoBank says fertilizer prices are likely to stay elevated through 2028. Jacquie Fatka, the lead economist for farm supply and biofuels at CoBank, talked about what they found.
“Everyone is feeling those tight margins, and fertilizer is a big chunk of that. You know, I guess in some ways, it’s good news in the sense that what we’re seeing looking ahead to 2027 and 2028 is higher, but maybe not as high as we once feared. Coming into the spring and curious on really what kind of impact we would see, how long the war would last, prices shot up really fast, and we’ve actually seen some of those price categories come down. Urea, for example, is actually lower than what it was pre-war, but we still see these prices elevated.”
There’s no question farmers have to work more closely with retailers to plan their purchases during the next couple of growing seasons.
“Without a doubt, higher prices are ahead. Producers are going to have to, again, look at where their cost of production is, and make sure that they can pencil out these higher levels. We saw really fast fills this summer. You know, summer fill is when, a lot of times, retailers will work with the producers to price out some of the 2027 needs. We saw that very brisk this summer, so a lot of things are moving. We’re watching a lot of different moving pieces in the whole picture of the fertilizer situation.”
Knowing the total cost of production will be more vital than ever in ’27 and ’28.
“I was in front of some growers last week, and one message I always try to communicate with growers, and I know all my ag retailer friends, my co-op agronomists all over, is know your cost of production. From a farmer standpoint, there are very few things as powerful as knowing your cost of production, because then you can really understand where you need to, one, maybe cut back, or you maybe have a little opportunity to spend a little more, but then, also on executing your marketing plan. And when it comes to fertilizer, we’ve seen 10 to 15 percent cuts over the last couple of years, especially the phosphate and potash. Nitrogen’s been a little slower, but, you know, this year we heard too, there are a lot of areas that had a pretty wet spring, and so in some of those areas, some of that nitrogen leached out.”
It’s also more important to get a handle on soil sampling and know what you need to add to the soil.
“You can do a little bit of mining of those soils, but the question is how long. And actually, I saw a report out just last week after I’d published my report of Mosaic officials saying that they could maybe see some revenge buying in the fertilizer segment. Kind of like what happened after COVID, where you didn’t do anything, you didn’t do anything, and then, all of a sudden, oh gosh, we got to go out and do this. And so, do we have that similar situation where we’ve had two, three, maybe four years of mining the soil, and all of a sudden, growers realize we took a hit on the yield? With fertilizer, it’s one of those things: if you reduce your applications, you may save a couple dollars on the front end, but you may lose a lot more on the end of that because your yields are lower, and that’s part of what we’re going to have to watch and see too.”