Fertilizer markets settle in to a lull — where to now?

(Kara Oosterhuis/RealAgriculture)

Some fertilizer pricing decisions and applications for the 2023 crop have already been made, but there’s plenty to be priced between now and April.

For a look at current and future fertilizer markets, we go to Josh Linville of StoneX, and start with the apparent lull in prices — is this a temporary reprieve from volatility, or have we settled in to a price slide?

Linville says that for phosphate and potash markets, reduced demand in the spring started a price slide that has continued in to the fall.

For nitrogen, it’s not quite as clear a picture on if we’re at or near the bottom. “European production has restarted to a certain extent, Russian exports have continued to flow, and then demand has been much more cagey this year hoping for a better situation. So yeah, here recently, we’ve seen prices come down,” he says.

When he says that Russian nitrogen “continues to flow,” it’s not direct to Canada, where Russian-sourced N is subject to a 35 per cent tariff.

“What we’ve seen is a little bit of a, I’m gonna say a workaround… Russian N has been going directly to the U.S., and that offsets tons in the U.S., whether that’s U.S. produced or brought in from around the world, not Russia, those tons flow up into Canada,” Linville says.

All that redirection does come at a cost, so even without paying a tariff, there’s definitely a premium being paid by Canadian farmers due to this duty, he says. “You are part of a world market whether you want to believe it or not, and we operate on a global S and D.” (story continues below)

Whether or not nitrogen prices are at a price bottom, Linville says that prices are still historically high, but crop prices are also holding strong. The ratio between crop price and fertilizer price has come closer to a more average range.

“Nitrogen globally is going to continue to stay very, very tightly supplied. [For] phosphate, we still have countries like Russia and China that are still very, very cagey on their exports. There’s just a lot of things, we still need to watch,” Linville adds.

One of the key things that was on the radar was natural gas pricing. Linville says that the market seems to have worked its way through the volatility, stockpiling, and planning, and that has pulled prices back from the worst-case scenario worked in to some models.


European natural gas prices the first black swan event of 2023 fertilizer marketing year

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