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Don’t wait on Middle East resolution to manage fertilizer price risk

An ag economist says producers can still protect their bottom line despite market volatility from geopolitical tensions in the Middle East.

Allen Featherstone with Kansas State University says farmers should take advantage of any price improvement in the fertilizer markets if they happen. “There may be an opportunity to shift of that risk away and go-ahead price a little bit of it. It may go lower, but it also may go higher.”

Featherstone tells Brownfield a resolution to the conflict won’t cause prices to drop immediately. “At least locking in some of that price in at this point just like when you’re selling your crops or livestock – certainty getting part of it sold or prices is always a good thing from a risk management standpoint.” 

He says that fertilizer prices initially moved lower after President Trump announced the Strait of Hormuz reopened for commercial vessel passage on Friday. On Saturday, the Iranian government said it was going to reclaim control of the waterway.