Why Fertilizer Prices Are Rising and Supply Is Tight

Natural gas is the primary feedstock and energy source used to produce nitrogen-based fertilizers like urea and ammonia. When natural gas prices rise, so does the cost of fertilizer production.

At the same time, fertilizer products are growing scarce. With more than 80% of countries importing at least 75% of their fertilizers, disruptions to major shipping routes are tightening global supply. Nearly a third of the world's traded fertilizer is shipped through the Strait of Hormuz, and its effective closure since late February means that countries relying on imported fertilizer from the Persian Gulf are already facing delays and acute shortages.

All of this has led to a sharp increase in fertilizer prices. Middle East urea prices have reached as high as $700 USD per tonne, up from $400 to $490 before the war began. The cost of urea from Egypt, which serves as a global benchmark, has also risen by more than 60%.

And this isn’t just a short-term spike. With the fertilizer supply chain expected to remain volatile amid ongoing geopolitical tensions in the Middle East, growers will need to be more deliberate in how they manage their fertilizer use over the coming months.

How the Fertilizer Crisis is Affecting Crop Producers

For many producers, fertilizer can be the single largest input cost in crop production – and an essential one. Fertilizers supply nutrients like nitrogen, phosphorus, and potassium to nourish crops. It’s also vital for maintaining soil health, which can affect long-term potential yields.

Between rising fertilizer prices and growing supply risk, farmers are having to absorb higher input costs or conserve their use of fertilizer, all of which make crop production increasingly difficult to plan for. The result is lower productivity, reduced yields, and ultimately, higher food prices.

Five Ways Growers Can Make Their Crop Fertilizer Go Further

To cope with potential shortages and rising input costs, here are five ways to get the most out of your fertilizer:

1. Use Evapotranspiration Forecasting to Optimize Fertigation

For farmers applying nutrients through irrigation systems (fertigation), improving water management can directly reduce fertilizer inputs. One effective strategy for optimizing fertigation is evapotranspiration (ETo) forecasting. It provides a reliable estimate of how much water crops are likely to need based on real-time climate conditions, allowing growers to match water and fertilizer delivery to actual plant demand. By preventing over-irrigation, it reduces any nutrient loss through leaching.

Real results in the field: A Mexican tomato grower reported a 16% reduction in water use by integrating ETo forecasting and climate tools using FarmRoad into their irrigation planning, estimating potential fertilizer savings of up to $80,000 per hectare annually.

2. Apply Fertilizer in the Right Weather Conditions

Timing fertilizer applications to suitable weather conditions is a simple way to prevent nutrient loss. Weather factors such as rainfall, air temperature, humidity, and wind speed all influence how effectively nutrients are retained in the soil and utilized by the crop.

Applying fertilizer right before heavy rain can lead to nutrients being washed away, while high temperatures and dry soil conditions can increase volatilization – a process in which nitrogen fertilizer is lost to the atmosphere before it’s taken up by the plant. For foliar applications, high winds and temperature inversions can cause spray drift, which not only wastes product but can also damage nearby sensitive crops. 

The difference between an effective application and a poorly timed one often comes down to a narrow window of optimal conditions. Using a weather-based decision support tool like GrowPilot’s Spray Timing Guide helps identify that window, eliminating any guesswork.

3. Supply Crop Nutrients Based on Soil Needs

To apply fertilizer efficiently, growers first need to understand their soil needs. A soil test can measure key parameters like nutrient levels, pH, salinity, and organic matter, helping determine what nutrients are available in the soil, what’s lacking, and how effectively they’re taken up by the crop. For example, suboptimal pH and high salinity soil conditions can limit nutrient uptake even when levels are sufficient.

Having soil information allows growers to replenish key nutrients to aid plant growth, avoid over-application, and adjust soil conditions where necessary to reduce fertilizer waste and improve overall efficiency. 

4. Use Precision Agriculture Tools to Guide Fertilizer Application

Precision agriculture involves the use of data-driven tools that help farmers determine when fertilizer is needed and the exact amount required.

Variable-rate application is a key example, which allows growers to apply different rates of fertilizer in each part of the field. The distribution may depend on factors such as soil variability, moisture content, topography, and historical yield data. Rather than applying a uniform rate across the entire field, which can result in excess nutrients in some areas and deficiencies in others, growers can target specific zones according to their crops’ nutritional needs.

5. Switch to Controlled or Slow-release Fertilizers

Controlled and slow-release fertilizers deliver nutrients more efficiently by releasing them gradually over time. This provides a consistent nutrient supply to the crop, supporting steady growth and reducing the risk of leaching or runoff.

Controlled-release fertilizers use coated prills or granules that release nutrients in response to soil temperature and moisture. Slow-release fertilizers, on the other hand, rely on microbial activity and natural chemical breakdown in the soil.

Despite the higher cost per bag compared with conventional fertilizers, they typically require fewer applications over the growing season, which can reduce labor time and effort and lower overall costs for growers in the long run.

The Bottom Line

In these increasingly uncertain times, growers who adopt smarter, more efficient fertilizer practices won’t just reduce waste, they’ll protect their harvests and margins, and build more resilient production systems for the seasons ahead.
 
Check out our article on managing other crop production risks like frost, heat stress, and plant diseases here.