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Geopolitical chess matches to affect ’23 fertilizer supply for Brazil, U.S. growers

An economist says geopolitical conflicts will have the greatest impact on the 2023 fertilizer market for U.S. growers.

Executive Director of Research with RaboBank Sam Taylor says even though the fertilizer supply is tight, may producers have already purchased inputs for 2022. “A lot of people will be focusing more on the Brazilian markets for a supply of a lot of fertilizers and you’re seeing that in a lot of fertilizer pricing. However, given the environment that we’re in and given the uncertainty, it probably behooves growers in particular to take a view on 2023 as soon as possible.”

He says Russia’s invasion into Ukraine has created more volatility in the markets and it’s likely that the biggest price hikes are coming. “We’ll have a convergence of prices globally at some point where product will ultimately be shipped to where products can get the highest net back. If you see product like prices in Brazil elevate substantially, you’ll likely see those prices mirrored in the North American market.”

And, Taylor says, future prices will depend on how much fertilizer is produced comparted to how much enters the market. “There will be some countries – potentially the Chinese or the Indians – who will take product onto the market. If that product is cut off the market, then that is more inflationary to the actual price of macronutrients, but if that squeezes in through the back door that is still product making it onto the market but through different routes.”

Taylor spoke with Brownfield at the 2022 Commodity Classic.