Happy Thursday!
Grab your coffee, because today's edition is a fertilizer sandwich with a farmland side dish. 🌾
The short version: input costs aren't easing up any time soon, one of the world's biggest fertilizer makers just posted a rough quarter, and U.S. land values keep climbing anyway.
Let's get into it.
🧺 The Big Bin: Fertilizer Prices Aren't Coming Down for Years
What happened. Farm Progress talked to Ed Thomas, VP of government affairs at The Fertilizer Institute, and the outlook isn't pretty.
Even if the Strait of Hormuz reopens for good, it could take a year and a half to two years for the global fertilizer market to actually stabilize.
Why it happened. Two wars, one supply chain. The Russia-Ukraine conflict already knocked out key production facilities.
Then this year's U.S.-Israel military action against Iran shut down shipments from Saudi Arabia, Iran, the UAE and Qatar, the countries that move roughly a quarter of the world's ammonia trade through the Strait of Hormuz.
Sulfur is the sneaky villain here.
It's the key ingredient in the sulfuric acid used to make phosphate fertilizer, and about half the world's sulfur exports come out of the Middle East.
Sulfur that used to trade for $100 to $200 a tonne is now pushing $1,300 a tonne.
Add in export restrictions from China, Russia, Turkey, Iran, Egypt and Kazakhstan, plus 31 ammonia plants shuttered by the Iran conflict and another 39 damaged by drone strikes in Russia, and you've got a supply crunch with no quick fix.
What it means for the farm gate. Phosphate is the real long-term headache. U.S. domestic phosphate production has dropped about 100,000 short tons a year since 2019, not because mines are producing less rock, but because the rock quality has declined.
That means more reliance on imports right when imports are the problem.
There's a silver lining: Washington recently suspended countervailing duties on Moroccan phosphate imports, which should help availability.
But experts are telling farmers to soil-test, apply phosphate only where it pays, and buy in smaller batches rather than betting on a price dip.