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Global Trends Drive Local Fertilizer Costs

Mid-County Coop members received a detailed look at the fertilizer markets from WinField United’ s Lee McAtee at the annual pre-harvest Agronomy event. Lee McAtee, a WinField United industry veteran in the crop nutrient division, emphasized that fertilizers are global commodities, with prices updating constantly in response to three major forces: geopolitics, energy costs, and affordability.

Winfield United operates as a distributor rather than a basic manufacturer, with one of its primary functions being to provide co-ops such as Mid-County with daily market intelligence.

Low U. S. Inventories: Strong demand and more corn acres have left U. S. nitrogen inventories( Urea, UAN) at or near 20-year lows. New domestic ammonia plants in Texas are largely built for export, not domestic distribution, which initially puts production on the global market. However, he explained that the new ammonia production in Texas being exported could potentially pressure major exporters like CF Industries to keep more supply within the US domestic system. This suggests that Nitrogen prices may see further increases to secure domestic supply, so early planning is essential.

Energy and Affordability: Natural gas, the main cost driver for nitrogen, remains stable domestically( around $ 3 –$ 4 per MMBtu). However, European production shutdowns caused by the Russia-Ukraine conflict continue to disrupt global trade, influencing U. S. affordability metrics.

Supply Concerns: Unexpected plant turnarounds have cut U. S. urea output by roughly 350,000 – 400,000 tons, increasing reliance on imports. To keep product in the U. S., prices may need to rise high enough to slow exports to better-paying markets.

He also detailed how China and India shape global urea markets. China, once producing 60 to 70 million tons of urea annually through coal-based facilities, has scaled back production over the last decade. When local Chinese prices spiked last year, the government shut down exports entirely, throwing international markets“ into quite a tizzy,” McAtee said.

Exports have since resumed, but McAtee noted the US does not trade fertilizer directly with China and only benefits indirectly from increased global supply. India, meanwhile, maintains enormous urea demand and a government subsidy that allows its farmers to buy urea for $ 60 to $ 80 per ton despite import prices up to $ 500 – an arrangement that keeps Indian demand consistently high.

Phosphate and Potash: Different Constraints

Phosphate( P) Crunch: U. S. production has declined for years due to limited reserves.

Five years ago, a company called Mosaic successfully petitioned the US Court of International Trade to impose countervailing duties on phosphate imports from Russia and Morocco – 16.6 % and roughly 40 %, respectively. McAtee said those duties effectively removed both countries from the US market.

Mexico is now one of the only remaining non-prohibitive sources, but its volume is insufficient, pushing the market toward new phosphate-type products. Growers are encouraged to consult with their Mid-County agronomist about new phosphate product options to ensure a reliable supply for next season.

Potash( K) Stable: Supply is strong and stable, with nearly all North American product coming from Canada. Global supply and demand are balanced, and a new Canadian mine opening next year is expected to add capacity. The current affordability of potash is encouraging farmers to purchase more, and a strong supply makes this a good time to ensure your Potassium levels are optimized for the best possible yield.

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