Fertilizer prices are falling as farmers who ignore expensive nutrients are refraining from buying, reducing demand, and causing surpluses that turn the agricultural input market upside down.
Fertilizer prices have been experiencing an all-time high hit earlier this year after boycotts on significant producers in Belarus and Russia’s war in Ukraine generated grain nutrient prices to soar. This has forced global fertilizer companies to increase purchases and ship bulk products to avoid supply chain issues and trade restrictions in export markets like Russia.
This move has boosted fertilizer stocks in some key areas and farmers are not interested in purchasing them. This is a situation that is currently weighing on the market. A pivot is taking place in the United States, a major fertilizer buyer and the world’s largest exporter of corn, and in Brazil, the world’s largest farming powerhouse and enormous supplier of soybeans all around the globe.
Given how high grain prices have been facing grain scarcity, farmers will buy inputs to produce grain. But when farmers experienced grain prices drop from their peak, they began to cut costs and reviewed their decisions regarding fertilizer application, supply, and impact on future crop yields.
Amongst the world’s largest exporters including Brazil, faces a comparable situation. This year, the country imported record amounts of fertilizer, giving farmers ample resources to expand their crop acreage.
“The record importing pace this year filled warehouses, making Brazil re-export the surplus,” said Maisa Romanello, fertilizer analyst for Safras & Mercado firm. That’s “pressuring prices internally and internationally, as Brazil imports smaller volumes in the second half of this year.”
