News

Analyst: Fertilizer bill “a little late”

A fertilizer market expert says new legislation calling for analysis of the fertilizer price spikes is better late than never.

Josh Linville with Stone X says, “It’s good that we’re getting the attention on it. It just seems like it’s maybe a bit on the late side.”

Linville tells Brownfield the Fertilizer Research Act, which calls for a USDA study on competition, trends, and other market factors is not a bad idea, but market prices peaked about a year ago and they’re lower now. “Urea, UAN, and potash are all down over 60% from where they were back then. Anhydrous is down just under 60%. DAP is a little bit less. It’s only down about 42%, so all of the values have come down fairly substantially from where they topped out.”

Linville says if the bill passes and USDA must research fertilizer prices, they will find the causes are global, including destruction of the Nord Stream Pipeline. “European natural gas prices rise. That means nitrogen prices go up. The Chinese government is restricting exports on urea, and we’re fearful it’s going to be on phosphate. That causes prices to go up. Russia attacking Ukraine, as Russia is the global largest exporter of anhydrous and they can’t do anything because that pipeline runs through Ukraine.”

Linville says he applauds the efforts of Senators Chuck Grassley and Joni Ernst of Iowa and Tammy Baldwin of Wisconsin.  He hopes it leads to future price stability and perhaps less tariffs because the highest per-acre expense for crop farmers is fertilizer.