By RHIANNON BRANCH

FarmWeek

As farmers enter another year of predictably tight margins, it does not look like fertilizer prices will grant much relief to the balance sheet.

“The problem is we’re starting 2025 with nitrogen and phosphate values looking fairly firm on tight supply and demand,” Josh Linville, vice president of fertilizer at StoneX, told FarmWeek. “We’re worried about what that means for our prices going into the spring.”

Chinese exports and European production of urea are both falling, which means global prices could push higher.

“That should result in a situation where we have to start doing a lot of work to get the imports coming in that we very desperately need,” Linville said. “We’re going to have to move our price up quite a bit to make that relationship happen.”

He said prices for urea ammonium nitrate and anhydrous ammonia, which are more commonly used in Illinois, usually follow the urea market.

One fertilizer that is well supplied globally and therefore mildly priced is potash, but that could change after President Donald Trump takes office this month.

“We have to worry about the threat of 25 percent tariffs against Canadian goods,” said Linville, who noted Canada is the world’s largest producer and exporter of potash. “These tariffs will have real effects on the farm side if they get implemented.”

Linville said Trump is known for using tariffs as an “economic weapon,” but for a commodity market like fertilizer the benefits aren’t likely to outweigh the consequences.

“A lot of times, the farmer of the country that implements the tariff is really the one that pays the price,” he said. “We are going to have to watch that because it could have an adverse effect on our pricing.”

On the other hand, Linville said the world “enjoyed a sense of peace” during Trump’s first term with fewer wars and global conflicts from 2016 to 2020, compared to recent years.

“On the flip side, I am very hopeful that if he can bring back a period of tranquility, we can see markets start to calm down, trade flows return back to normal and get prices back to historic norms,” he said.

Linville said as always it will be important for farmers to convey their fertilizer intentions to suppliers in 2025 so they can plan accordingly.

“I understand it’s easy to want to bury your head in the sand in these kinds of times, but we need to have more information flowing than less,” he said.

And despite a hefty delay to the fall 2024 fertilizer application season, Linville expects the number of spring applications to be about normal.

“It was probably one of the most unorthodox fall application seasons we’ve ever seen,” he said. “The first several weeks of November, hardly anybody across the Midwest turned a wheel.”

But he said the weather opened a window around Thanksgiving and Midwestern farmers took advantage of it.

“We surveyed the industry, and I think we hit about 90 percent of what our expected fall run was,” Linville said. “So that is fortunately keeping that horror story that we were talking about for springtime off the table.”

Fertilizer prices in Illinois averaged between $650 and $775 per ton for anhydrous ammonia as of Dec. 27, up an average of $9.46 from the previous two weeks, according to the Illinois Production Cost Report. Prices ranged from $679 to $760 per ton for diammonium phosphate (up $3.33), $400 to $525 for potash (down slightly) and $525 to $554 for urea (unchanged) as of the same date.

This story was distributed through a cooperative project between the Illinois Farm Bureau and Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.