Fertilizer prices are falling after hitting records in 2022 as gas costs and farmer demand both decline.
The Green Markets North American Fertilizer Index fell 4% Friday to $672.82 per short ton, the lowest since June 2021. The index surged to a record $1,270 per short ton after Russia’s invasion of Ukraine threw the world’s crop-nutrient sector into disarray.
Tanking prices could bring relief to farmers, who have faced rising costs for everything that goes into growing food, from chemicals and fuel to equipment and labor. An easing of cost pressures could encourage farmers to plant more acres and apply more fertilizer, boosting production and helping to eventually bring down the cost of food for consumers experiencing historic inflation.
The fertilizer industry is globally bearish right now as farmers aren’t buying and the price of natural gas, the main input for most nitrogen fertilizer, declines, said Bloomberg Intelligence analyst Alexis Maxwell.
“We expect lower fertilizer prices in the first half of the year, yet the US market could bid regional prices higher in the first quarter as farmers scramble for tons,” she said.
(By Elizabeth Elkin)