Fertilizer prices are dropping as farmers, frustrated by the high costs, hold off on purchases. This is driving down demand and causing gluts that are upending the market for crop inputs.
Fertilizer prices soared to record highs earlier in the year after sanctions against Belarus, a major producer, and Russia’s war in Ukraine fueled soaring prices for crop nutrients. That prompted global fertilizer firms to boost purchases and transport massive amounts of product to avoid supply chain issues and trade restrictions in export markets such as Russia.
These moves have led to bloating fertilizer inventories in some key regions, and farmers just aren’t buying, a situation that’s now weighing on the market. The turnabout is playing out in both the US, a major fertilizer-buying nation and the world’s top corn exporter, as well as agricultural powerhouse Brazil, the number 1 soybean supplier.
A weekly index for the common nitrogen fertilizer urea in New Orleans fell 3.2% Friday, extending a monthlong downward trend as US farmers wait to see how low prices might go. Brazilian farmers are also halting purchases, driving prices down as fertilizer piles up. Global nitrogen prices are still trading at nearly five times historical averages.
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