If falling corn prices weren’t bad enough, fertilizer prices surged higher to finish June. With the corn to fertilizer price ratio now some of the worst in history, it’s likely farmers will be spending more on fertilizer this fall.
Josh Linville, vice president of fertilizer for StoneX Financial Inc., says the current fertilizer and corn price ratio is at historic levels:
- Urea: third worst in history
- UAN: second worst in history
- Phosphate: worst in history
“When we look at the price of urea versus grain prices, something we look at quite a bit, especially the corn price, values are incredibly high,” Linville says. “This is what the farmers are struggling with. They’re saying, my corn price and my grain price continues to fall almost daily, and yet my fertilizer prices are insanely too high.”
Why Have Fertilizer Prices Surged?
There’s a number of reasons, but they are all global. The latest reason was the U.S. bombing Iranian nuclear sites and talk of closing the Strait of Hormuz. Considering Iran is the third-largest producer of urea, the news sent urea prices higher.
Once a ceasefire was announced, urea prices did see a quick drop, which was welcome news to farmers. But just this week, those prices are trending higher again.
“We saw our barge values in the Gulf rise from, they had dropped down to about $345 per ton, and they rallied about $100 a ton. Fortunately, ceasefire was found very, very quickly there, after the attacks and things had calmed down, prices started to fall, and we went from a level of $455 per ton back down to $385,” Linville says. “Now all of a sudden India is stepping in with a major purchase, Brazil demand is around the corner, and urea prices have firmed yet this week.”
But it’s not just Iran. According to Linville, Russia is the top producer of urea around the globe, which is in the middle of a war. And Egypt is the fourth-largest urea producer in the world, which production had been down as Israel scales back gas due to the war in Iran.
It’s Not Just Urea Seeing High Prices
Whether you’re talking nitrogen, DAP or phosphate, fertilizer prices are trending higher across the board.
So, let’s talk about the why. According to Linville, like urea, it’s all global
- Nitrogen prices are rising largest due to the ongoing war between Russia and Ukraine, as well as the fighting in the Middle East.
- Phosphate prices are high due to the fact China is restricting exports. Linville says China typically exports 8 to 10 million tons of phosphate each year. This year, it’s likely China will only allow 4 million tons to be exported.
- Potash prices are being driven largely by India and China. Linville says potash manufacturers were able to get India and China to buy at high prices versus last year’s level. That has set the tone for the rest of the world.
Because so many world events are creating higher fertilizer prices, Linville isn’t optimistic prices will see much of a reprieve yet this year.
“I’m not going to say I guarantee you prices will not fall between now and the fall season,” he says. “A lot of things can change. We still have several months before we get there. But I can tell you there’s a lot more roads that are leading to prices being flat to higher than there is even consideration on the lower. Even the lower price ones take a lot of different things coming together to make it happen.”
Farmer Sentiments Were Falling Before the Latest Surge in Fertilizer Prices
Farmer sentiments were already trending lower, even before the recent surge in fertilizer prices. According to the June Ag Economy Barometer, which was released by Purdue University on Tuesday, farmer sentiments fell to 146, which was down from 158 in May. Purdue economists say the drop in farmer sentiments was largely due to a more pessimistic outlook on the future and concerns about tariffs and exports. The survey took place June 9-13, which was before the U.S. bombed Iranian nuclear sites, which caused fertilize prices to skyrocket.
“Farmers remain concerned that the United States’ tariff policies could negatively impact their farms’ income, but fewer producers in May and June said that they expected a negative or very negative impact on income than when tariff policies were the focus of attention in March and April,” Purdue University economists said.
Farmers Have Had Virtually No Opportunities to Sell Corn at Profitable Levels in the Past Year
According to Jon Scheve, there have been virtually no opportunities to sell 2025 corn at a profitable levels in the past year. Scheve, who is with Superior Feed Ingredients, says farmers have only seen four days in the past year where corn prices were above breakeven.
“After reviewing breakeven levels with many farmers throughout the U.S., it seems the average farmer in the U.S. needs a $4.75 futures value with normal yields to turn a profit this season,” Scheve says. As this chart shows, in the past year there were only four days where the price point was above the breakeven.”
When it Comes to Fertilizer, What Can Farmers Do?
If farmers haven’t seen the highs in fertilizer prices, what can farmers do at this point? Linville says it’s more important now than ever to pay attention to global events and stay in constant communication with your fertilizer suppliers.
“Keep your head up,” Linville says. “I know when times get tough, it’s so easy to just want to stick your head in the sand and not pay attention to it, and hope that by the time you start to harvest, everything is improved but we miss opportunities that way. I understand how uncomfortable it is, but knowing what is going on around the world, why that matters for fertilizer prices, watching some of these relationships, there may be something that pops up for a day or two. That’s a great opportunity to price, but if we’re not paying attention, we’re not talking to our elevator and our supplier, how are we supposed to know it was there?”
Linville advises farmers to stay engaged, and when you see those pricing opportunities, jump on them, because he thinks they could be far and few between this year.
