Delay in fertilizer purchases could prove costly
SASKATOON — Conflict in the Middle East means higher fertilizer bills for many farmers this spring, but the impact will be even greater in the fall, says an industry official.
Casper Kaastra, chair of Fertilizer Canada, said farmers typically start purchasing their spring needs around harvest time of the previous crop.
However, purchases during the fall of 2025 were pushed back because grain prices were down and fertilizer prices were high.
Read Also
4R nutrient stewardship compliance comes up short
A majority of farmers believe they’re using Right Source, Right Rate, Right Time and Right Place practices for fertilizer.
Why it Matters: Fertilizer is the most expensive input for most crops.
“Farmers were fairly reticent to step up and make commitments on purchasing fertilizer when it didn’t look very good for them on a cashflow basis,” said Kaastra, who is also the chief executive officer of Sollio Agriculture.
Bin space was also tied up due to the 2025 bumper crop and China’s canola and pea import tariffs.
“It took several months to kind of clear out a lot of that inventory before farmers could start purchasing the fertilizer for the following spring,” he said.
The delay proved costly as fertilizer prices have skyrocketed.
Urea prices in New Orleans were up 48 per cent three weeks after the closure of the Strait of Hormuz, while UAN prices soared 34 per cent, according to a March 20 X social media post by StoneX fertilizer analyst Josh Linville.
Bill Prybylski, president of the Agricultural Producers Association of Saskatchewan, said the retail price of fertilizer in his area near Willowbrook, Sask., is up 30 to 40 per cent from where it was last fall.
“I know on our farm, we’re going to need to source about a third of our fertilizer come springtime,” he said.
“So, on our farm, it’s going to certainly hurt our bottom line.”
Prybylski agrees with the notion that a lot of farmers delayed their fertilizer purchases last year waiting for commodity prices to rise and to free up bin space and that that is going to cost them.
Kaastra said urea and UAN are the two products most affected by the Middle East conflict. The region accounts for 35 per cent of global urea trade.
However, he believes phosphate will also be affected because sulphur and ammonium are two ingredients used to manufacture the nutrient, and the supply of those two commodities has also been disrupted by the conflict.
Nitrogen products account for an estimated two-thirds of total wheat and canola fertilizer costs for growers in Saskatchewan’s dark brown soil zone, while phosphate makes up most of the remaining one-third, according to Saskatchewan Agriculture’s 2026 Crop Planning Guide.
Kaastra is concerned farmers are going to be facing an even bigger fertilizer bill when they start filling their needs for spring 2027 this fall.
Retailers are going to be stocking their shelves with today’s high-priced products, and he doesn’t anticipate those prices dropping anytime soon.
Neither does Prybylski.
“It usually seems like fertilizer prices go up like a rocket, but they come down like a parachute,” he said.
He has booked product as early as July for the following spring, but that won’t be happening this year.
“We will delay as long as we can and hope that prices come down eventually,” said Prybylski.
Kaastra anticipates that even if the hostilities ended today, it would likely take at least three months for supply and demand to come back into balance.
However, it could take even longer than that, depending on how much damage was caused to natural gas and urea production facilities in the region.
Kaastra does not think there will be a fertilizer shortage in Western Canada this spring, but he strongly encouraged farmers to talk to retailers about their needs well in advance of spring rather than relying on spot buying.
“Nobody is going to have extra product on spec at these prices,” he said.
It will be even more important to have those conversations leading up to the fall buying period because the supply issues could be more pronounced by then as retailers stock up with today’s high-priced product.
Kaastra said farmers may decide to switch crops or cut back on fertilizer application this spring for nutrients that can build up in the soil, such as phosphate and potash.
“You can kind of mine the soil temporarily on some nutrients and draw down those levels,” he said.
Prybylski said farmers will have to take a close look at their individual operations and make some judgment calls.
“I can see some acres shifting away from high-use crops like corn or canola into some crops that don’t need as much fertilizer like pulses or even oats to a certain extent,” he said.
He also wouldn’t be surprised to see more summer fallow acres than normal.
Prybylski thinks farmers will cut back on nitrogen rather than phosphorus because a grower might lay down 100 to 150 pounds of nitrogen per acre compared to 15 to 20 lb. of phosphorus.
“The amount of phosphate that farmers put on is very small compared to the amount of nitrogen,” he said.
He said skyrocketing fertilizer prices are just one more challenge growers are facing in today’s turbulent farm economy, which has been battered by wars, tariffs and surplus production.
“Margins are going to be really tight for producers,” said Prybylski.
“It seems that it’s one thing after the other that we’re having to deal with. It is getting to be kind of frustrating.”
Source: producer.com