Major Weather Factors Combine to Put Fertilizer Prices and Availability in Question

Low water levels on the Mississippi River are a concern for moving grain and fertilizer up river. The worry comes as Florida, a key fertilizer-producing state, cleans up after Hurricane Ian.

So, what impact is all this having on fertilizer prices?  

After record high fertilizer prices through much of 2022, the good news for farmers is supplies and logistics are in good shape for this fall, and that should keep prices from spiking higher during the fall application season. 

South Dakota farmer Jeff Thompson admits he's been watching these potential supply chain issues and is concerned about the price and availability of fertilizer as he rolls through the harvest season. 

"The next task is getting fertilizer," Thompson says. "It’s crazy expensive — getting it is going be tough and it will drag into next spring too."   

Thompson has been watching the reports of slow barge traffic on the Mississippi River and assessments of hurricane damage in Florida, home to 75% of all phosphate fertilizer produced in the U.S.  

However, with the storm moving further south than anticipated, the industry and prices dodged a bullet.

"There's talk that there could be a loss of 200,000 to 250,000 tons of product," says Josh Linville, StoneX's vice president of fertilizer. "That is a very big number but the key is we're estimating up to that level."

Linville says his numbers are likely conservative when considering the upside estimate. But the market has largely shrugged off potential loses, according to Linville, who feels a loss a quarter million tons of fertilizer is "not that large of a deal" when it comes to the markets.

Potash and phosphorous markets shouldn't react to low water levels in the Mississippi, according to Linville, as he believes most of producer's needs for next season have already been delivered.

"We feel like the vast majority is already in place. There are enough demand concerns that hopefully the river levels out and we have what we need in place," he says. "However, anytime you start talking about losing something as substantial as the Mississippi River, it has ramifications across all fertilizer products."  

So far Linville says potash and phosphate fertilizer prices are running above last fall, but  have dropped off the record high prices set this spring.

Linville says if there are any supply chain disruptions in the fertilizer industry, the bigger impact may be felt this spring, again depending on the weather and precipitation levels this winter.  

What spring 2023 will bring is still a question mark.