Fertilizer Suppliers Report High Costs, Limited Availability

Humic mine fertilizer prices

The Rockland Mine in Emery, UT, is where Live Earth Products mines for its humic and fulvic acids for use in its agricultural products. Photo: Live Earth Products

The past year was tough for the fertilizer market. Limited availability caused a sharp rise in prices. Delays in the supply chain also compounded the problems, putting growers and suppliers between a rock and a hard place. Russell Taylor, Vice President of Live Earth Products, says the war between Russia and Ukraine impacted the market, which was already strained.

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“Russia’s invasion of Ukraine in February 2022 exacerbated an already tight global fertilizer supply, boosting prices to all-time highs in March,” Taylor says. “While certain ameliorative measures have eased some of the price pressure on U.S. farmers, volatility in the natural gas market will likely keep fertilizer prices high for some time.”

U.S. growers are trying to price their fertilizer needs early for next year’s crops. However, due to the short supply of fertilizer and an uncertain geopolitical climate, suppliers have increasingly shifted to a just-in-time pricing structure. Growers and suppliers are moving toward more formalized contracts, Taylor says.

Alex Ramos, North America Marketing Manager for Haifa Group, says fertilizer prices for water-soluble blends and straights continue to remain firm. The high energy costs in Europe and shutdown of nitrogen facilities in Europe are providing support to the nitrogen pricing, but there are some signs of potential softness on phosphorous and potassium. If those materialize, Ramos says, it will take time for those to reach consumptive markets.

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Supply Chain Hard to Forecast

Taylor says the supply chain in the U.S. has improved slightly with growing stockpiles after pandemic-related supply chain and production issues and trade flow realignments in the aftermath of the Black Sea conflict. Despite these improvements, supply availability will be difficult to forecast for global agriculture markets.

“Fertilizer producers expect potash trade flows out of Russia and Belarus to remain constrained by sanctions throughout 2022,” Taylor says. “China’s export ban on phosphate and urea shipments, which went into effect a year ago, will likely remain throughout this year.”

Ramos says nitrogen supply is limited and costs are up significantly. Water-soluble phosphates are challenging to obtain, and the quality of what is available can be affected.

“Potash supply continues to improve, but with increased energy costs and transportation costs, any market adjustments may be limited,” he says.

Greenhouse growers are looking for both nitrogen-phosphorous-potassium (NPK) blends and straights. A lot of growers have had to balance the use of the two because of product availability, Ramos says. As the majority of calcium nitrate originates in Europe, this remains a concern for supply availability.

Transportation Costs Affect Pricing

In addition to the increased energy cost impacts, transportation has also increased costs, Ramos says. Many water-soluble products must be imported into the U.S. for manufactures to produce NPK blends. The increased cost of container shipments from Europe and other countries has increased the raw material costs for these blends.

“Ocean freight rates remain high compared to pre-COVID rates and freight capacity is still struggling to keep up with needs,” Ramos says. “While supply to growers has improved over the past six months, there are still issues in some areas.”

He says growers are experiencing increased costs and limited supply. Product availability has increased from the previous year, but costs are up dramatically. Ramos advises growers to communicate with their supply partners about market realities and the resulting impact on nutrient needs to deal with the dynamic market.

Find Efficiencies to Cut Costs

Taylor says the fertilizer price shock has spurred interest in high-tech precision-application tools and equipment that reduce the required amount of fertilizer, as well as inputs that can add nutrients to soil without the need for natural gas during production, while extending fertilizer life. Humates can also help extend fertilizer life, while improving soil structure, nitrogen uptake, water holding capacity, and root growth for healthier crops.

“Organic soil amendments rebuild depleted soil and improve soil productivity for the future of farming,” he says.

Suppliers are learning to adapt to the volatile environment regarding costs and supply chain issues to best serve their customers.

“While there have been some challenges from time-to-time, Plant Products has successfully worked with our manufacturer and logistics partners to ensure that we can continue to provide our customers with the products they need when they need them,” says Scott Hodgins, Market & Business Development Director.

Throughout the course of the last few years, Plant Products’ technical and IPM representatives have met with their customers to consider all inputs in relation to their management strategies and production goals, he says.

“In some cases, these discussions have resulted in minor adjustments to customers’ management strategies with the overall goal of maximizing the quality of their product as well as their return on investment,” Hodgins says.

One tool Haifa offers is NutriNet, a free online program to help growers look at their current nutrition program and see if it is meeting the crop needs.

“Growers should be evaluating their nutrition programs on a regular basis, not just when the price of fertilizer goes up,” Ramos says.

Ramos says growers should begin seeing lessened lead times as material begins to become more available, but costs have increased and there are still issues and delays in many ports.

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