May 31, 2023
International Fertilizer Price Fluctuations
In the past year we have experienced huge fluctuations in the global fertilizer markets. In 2022, fertilizer shortages developed and the price of fertilizers increased up to 180% in some cases.
These large fluctuations have been largely due to changes in trade flows with Russia because of the tensions in the region, sanctions imposed on Russia, inflation, and other pandemic-related complications with transportation logistics. Collectively, expensive fertilizer prices have been a challenge globally and certainly in our crop production systems of the desert Southwest.
Recently, several retail fertilizers have varied significantly in the market trends. For example, in May 2023 about half of the major retail fertilizers are higher compared to April prices and the other half has lower prices than last month (Quinn, 2023).
Urea (46-0-0) has gone up 6% in retail markets since last month with an average price of $664/ton. A few weeks ago, urea was below $600/ton for the first time since late 2021. Similarly, diammonium phosphate (18-46-0), monoammonium phosphate (11-52-0), and urea ammonium nitrate (32-0-0) had an average the past month of $517/ton.
In contrast, anhydrous ammonia (82-0-0) has had an average price recently of $910/ton, which is down about 9% in price from April 2023. Several other major fertilizers have been lower in price the past month. Muriate of potash (KCl, 0-0-60) had an average price in the past month of $627/ton, ammonium polyphosphate (10-34-0) average price has been $739/ton, and urea ammonium nitrate (UAN-32, 32-0-0) average price has been $423/ton this month.
Note that several of the major fertilizer materials come in different forms. For example, urea ammonium nitrate (UAN) is 28% N in some materials and 32% N in another common form. Also, monoammonium phosphate (MAP) can have N concentrations of 10-12% and P2O5 concentrations of 48-61% with 11-52-0 being probably the most common form in the market.
Considering the overall trends in the past few years, international fertilizer prices have been generally decreasing since the summer of 2022. Today, international fertilizer prices are back in a range close to early 2021. International fertilizer prices are not expected to drop below pre-pandemic levels, primarily due to global inflation that generates an increase in production and transportation costs (Figure 1).
Several expert sources in the fertilizer industry are projecting a drop in international fertilizer prices in the coming months by approximately 50% of the prices experienced last year. Accordingly, many fertilizer importers are waiting to ship to markets and farmers are often waiting and watching for the projected drop in fertilizer prices to materialize before purchasing (Schnitkey et al., 2023).
Despite the high degree of volatility in international fertilizer markets and the limited availability of fertilizers in some crop production sectors that have recently been experienced, it is expected that the downward trends will continue.
Looking ahead, many experts in the international fertilizer industry are recommending for producers to not wait until too late to purchase fertilizers for upcoming crops, utilize economies of scale when purchasing fertilizers materials as much as possible, and of course watch the trends in fertilizer markets. International logistics in the fertilizer industry, including shipping, transfer, and distribution of fertilizer cargo is proving to be very important in realizing a more stable fertilizer market for the future.
Figure 1. Example of fluctuations in fertilizer prices per ton of material from
January 2021 through March 2023. Source: Schnitkey et al. 2023
Schnitkey, G., N. Paulson, C. Zulauf and J. Baltz. 2023. Fertilizer Prices and Company Profits Going into Spring 2023. farmdoc daily (13):36, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, 28 February 2023.
Quinn, R. 2023. DTN Retail Fertilizer Trends: Fertilizer prices moving in two directions. DTN Newsletter, 17 May 2023. https://www.dtnpf.com/agriculture/web/ag/crops/article/2023/05/17/fertilizers-moving-two-directions
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