Why High Fertilizer Prices?
After a late 2025 drought and lower crop prices, farmers are looking ahead to the 2026 crop year. High volatile fertilizer prices will be a major concern this next year. Currently, DAP retail price is $926 per metric ton up from $580 in January. DAP or diammonium phosphate is 18% nitrogen and 46% phosphate (18-46-0). The retail price for MAP (mono ammonium phosphate) is $921 per ton. Potash or potassium (60% potash or K, 0-0-60) prices are about 24% higher than last year at $483-485 per ton. Some global spot prices are $350-$360 per ton. Ammonia prices (NH3) are about $440 to $450 per metric ton.
Why are prices too high? There are a number of factors but the major one are supply disruptions due to the Russia/Ukraine war, China cutting back on exports, high tariff costs, port disruptions, high global demand and competition for fertilizer, and still high energy costs which is used to make most nitrogen fertilizer.
First, the Russian war with Ukraine has disrupted nitrogen (N) fertilizer. Both Russia and Belarus export N fertilizer and the war has reduced this export commodity. Second, China is a major exporter of phosphate, and they have reduced shipments. Third, high fertilizer tariffs from both Canada (85% of the phosphate imported to the USA) and China make P fertilizer more expensive. New tariffs on Morocco (largest supply of P in the world) and Russia add to this problem.
Other problems include supply disruptions due to shipping restrictions, port congestion, and trucking shortages. The low level of water in the Mississippi River continues to hamper grain exports on one end and fertilizer shipments coming in on the other end.
Overall, global demand for food is rising as populations rise and people become wealthier. Higher worldwide food demand is causing increased use of fertilizer in other countries, especially Brazil and India. Natural gas is a major ingredient in N fertilizer. Natural gas prices are rising due to higher liquid natural gas exports overseas, causing N fertilizer prices to rise in the USA.
Who supplies our fertilizer? Overall, the USA only imports about 25% of our fertilizer but it is not evenly distributed. On Nitrogen (N), we make about 82% and import about 18% mainly from Canada and Russia. On phosphate, we make about 87% and import about 13% from mainly Saudia Arabia. On Potash or potassium (K), we only make or mine about 3% with the rest imported from Canada and Russia mainly.
While China is not mentioned in this analysis, they export fertilizer world-wide, mainly to our competitors like Brazil, India, Australia, and Mexico. Global fertilizer prices are determined by world-wide global fertilizer demand. The USA is not a major exporter of fertilizer. On nitrogen, we export 4.6% of N fertilizer. Russia exports 16.5% and China 11.2% as the major N fertilizer exporters. On phosphate, the USA is fourth at 11.2%. China is first at 25.2% followed by Morocco (17.4%) and Russia (12.7%). Canada has the highest K exports with 36.2%, followed by Belarus (18.5%) and Russia (16.5%). (Source: American Farm Bureau Federation).
Will prices get better in the short term? Not likely. It takes time for trade policies to be enacted and enforced. The European Union has tariffs on Russian fertilizer and the Russian/Ukraine War is still ongoing. Brazil and India are getting most of the Russian fertilizer exports. Our Canada imports of fertilizer are down due to the 10% Canadian tariff. Until that is resolved, that means less fertilizer or much higher prices.
China is using more P fertilizer itself and exporting to our competitors. China is deliberately messing with fertilizer prices with their restrictions to cause price uncertainty and higher price risk. Long-term, it is difficult to change where we get our fertilizer. The USA still has phosphate reserves, especially in Florida; but they are expected to run out in 25-50 years. We can easily make our own N fertilizer, but we only mine about 3% of our own potash fertilizer. Potash mines are concentrated in Canada, Russia, and Belarus. Phosphate is dominated by China, Morocco, and Saudia Arabia.
Due to the Russia/Ukraine War, Russian N fertilizer exports are down 80% which impacts N fertilizer prices world-wide. It will take new investment in modern facilities long-term to reduce N fertilizer prices to make up for this reduction. Luckily for the USA farmers, USA natural gas production is rising and that should help reduce N fertilizer prices long-term.
For farmers, this is a critical time because their profit margins are shrinking, in some cases they are negative. Farmers should consider possibly cutting back on fertilizer, especially P and K which are stored in SOM.
Annual Convention 2026