According to industry experts at the USDA Ag Outlook Forum last week, the fertilizer industry could be entering a new era. After record-high prices impacted U.S. farmers in recent years, some declines have been welcomed amidst ongoing inflation battles. However, prices will likely remain elevated in 2023. The fertilizer industry appears to be at a crossroads.
The International Fertilizer Association Director of Market Intelligence Laura Cross said at the forum that fertilizer is not actually in short supply. Contrary to popular belief, Russia’s war in Ukraine did not lead to as large of a decline as expected in global supplies. In fact, global phosphorus production increased in 2022. According to Cross, nitrogen and potash were somewhat curbed, but there was never a significant drop-off in production. Another myth Cross dispelled is that prices are still at record-high levels. While prices did increase, global prices have been on the decline due to better-than-expected production.
Russia continues to export fertilizer around the world despite certain sanctions. As the world’s leading supplier of anhydrous, production and supply have not stopped due to the war. Cross says the more important storyline is farmers switching to different forms of nitrogen, forcing musical chairs in terms of demand.
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