Market update report

The agriculture sector is grappling with the persistent challenge of fertilizer price volatility. While prices have not returned to the record highs of 2022, they remain elevated and unpredictable. For farmers, these dynamics are squeezing already tight margins, making strategic planning and cost management more critical than ever.  

Fertilizer Prices 

Source: DTN Progressive Farmer Prices. 

What’s driving fertilizer prices?

• Geopolitical tensions and trade policies – The U.S., as a net importer of fertilizer, produces less than 9% of the global supply while importing 11%. Notably, 95% of the potash consumed in the U.S. is imported, with the majority sourced from Canada. However, a 10% tariff on Canadian potash has further driven up domestic prices.  China, one of the world’s leading exporters of phosphate and urea, has implemented inconsistent export policies. This has tightened international supply and challenged U.S. buyers who rely on steady imports. Additionally, urea prices are being impacted by increased demand from India, which has been purchasing large quantities in response to favorable rainfall during the 2025 monsoon season. The ongoing Iran-Israel tensions has led to fertilizer and natural gas (the primary ingredient for nitrogen-based fertilizers) production shut-downs in Iran and Egypt, exacerbating global supply shortages. 
• Transportation challenges – The Mississippi River plays a vital role in moving fertilizer from production and import hubs near the Gulf to farms up the river. Low water levels in 2025 have reduced its throughput capacity and incentivized suppliers to utilize rail and trucking, which are significantly more time consuming and expensive modes of transportation. 
• Energy market fluctuations – Natural gas, a key input for nitrogen fertilizers, remains a critical cost driver. Seasonal demand spikes, rising energy demand from data centers, and disruptions due to wars in Europe and the Middle East, are significant market drivers. Rising natural gas prices in the U.S. and Europe are pushing up production costs for ammonia, urea, and UAN (urea ammonium nitrate). 

Impact on producers   

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