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Rising urea prices signal increased fertilizer market risk as Iran conflict continues

An ag economist says urea costs are the highest they’ve been in four years. 

David Widmar with Agricultural Economic Insights says the longer the conflict in Iran goes, the higher prices could go.

“Surging urea has created a price gap between urea and anhydrous ammonia,” he says. “Usually, anhydrous has a $16 per acre advantage. The spread today is above $50 per acre. Producers might find an advantage if they switch to an alternative nitrogen source.”

He tells Brownfield U.S. nitrogen imports usually peak in May, but, “There’s just not a lot of the data right now that is suggesting that we might see significantly lower fertilizer costs this fall or even this spring. The wild card here are transportation costs. That could really change a lot.”

Widmar says fertilizer currently accounts for 21 percent of budgeted corn revenue, only four percent below the 2022 record of 25 percent.

AUDIO: David Widmar, AEI