Falling affordability set to cut US autumn fertilizer demand

Fertilizer buyers, from wholesalers to growers at the farmgate, have a challenging autumn application season ahead of them, according to attendees of the Southwestern Fertilizer conference in Nashville, Tennessee, US. The Argus fertilizer affordability index, a measurement of fertilizer costs relative to the price of a basket of crops, currently stands at 0.71 – well below the baseline of 1. The index began the year at 0.98 but has been falling quickly with the implementation of duties on US imports, as the domestic fertilizer market relies on offshore suppliers to meet demand.

The index is also being pulled down by the notable amount of corn acreage planted across the US in spring 2025 that, paired with favourable growing weather, raised the possibility of a bumper crop. Approximately 95.2 million acres of corn were forecast to be planted by farmers, the US Department of Agriculture said in early 2025, up from the 90.6 million acres planted in 2024 and a five-year-average of 91.3 million acres.

2025’s corn crop will drain fertilizer inventories and nutrients from the soil across the country, while likely teeing up a massive crop that has depressed US corn futures. The December corn futures contract traded as low as US$4.07/bushel on 14 July before rebounding to settle at US$4.22/bushel on 21 July. Still, prices have fallen from a high of US$4.80/bushel on 19 February.

Domestic fertilizer prices have rallied in recent months as tariffs restrict imports, only further undermining affordability.

Waiting before buying

Given these dynamics, wholesalers and retailers will likely wait to purchase a large portion of their fall fertilizer needs until demand is better understood, avoiding the risk of paying current prices and bearing the burden of storage and carrying costs.

Ammonia markets, in comparison, have yet to be directly impacted by import tariffs. But higher urea and urea ammonium nitrate (UAN) prices inflated summer fill offers to well above market expectations, coming in around US$110/st above offers in 2024.

Despite this, ammonia remains the most affordable nitrogen fertilizer product on a nutrient basis and could maintain economic favourability during the fall if availability of other nitrogen products remains constrained by a lack of imports.

Tariffs keep the market on edge

US fertilizer prices are unlikely to come down in the near future as the market grapples with uncertainty related to tariff policy and the possibility of new, potentially harsher duties expected by 1 August.

When the current tariff policy was implemented in April by President Donald Trump, nearly all seaborne fertilizer imports became subject to a blanket 10% tariff, making the US a less attractive outlet for exporters.

US phosphate imports have seen a dramatic response from the market, with most offshore diammonium phosphate (DAP) and monoammonium phosphate (MAP) tons being kept off US shores.

DAP imports into the US for January through May are down by 22% from the 2024 - 2025 fertilizer year, while MAP imports by comparison are just 2% higher, according to US Census Bureau data.

Tariffs also partly drove a nitrogen supply crunch this spring, with only one vessel of urea anticipated to arrive at New Orleans in July, based on vessel tracking data and market sources. The US nitrogen supply balance has been further strained by low inventories in India and recent production disruptions stemming from ongoing conflicts in Ukraine and the Middle East.

The absence of tariffs on Russia has given the US nitrogen market a crutch to lean on, but Trump has recently taken an increasingly adversarial approach to relations with the country, looking to provide arms to Ukraine and threaten more sanctions. The US Senate this month could vote on a Russian sanctions bill that would give Trump the legal authority to tariff Russian imports.

Trump's tariff rates could climb further on 1 August, with the administration threatening higher duties on a growing list of countries – including 30% on Algeria and the EU, 25% on Tunisia and Brunei, and 19% on Indonesia – raising fresh concerns for US fertilizer importers. The US imported around 666 800 t from these origins in 2024, accounting for about 13% of all imports.

Article originally written by Calder Jett, Sneha Kumar, Chris Mullins and Taylor Zavala on Argus Media. Read the original article here.

Read the article online at: https://www.worldfertilizer.com/nitrogen/23072025/falling-affordability-set-to-cut-us-autumn-fertilizer-demand/