Global instability and energy prices push fertilizer costs higher for growers
Texas farmers are experiencing a sharp rise in fertilizer prices this spring, adding pressure to farm budgets already strained by uncertain crop prices and weather challenges. Fertilizer is a globally traded product, and disruptions in international markets have affected prices across regions.
“Fertilizer is a global commodity, so when disruptions occur anywhere, prices tend to rise everywhere,” said Mark Welch, Ph.D., AgriLife Extension grain economist and professor in the Texas A&M College of Agriculture and Life Sciences Department of Agricultural Economics.
Economists report that prices remained stable earlier in the year but began rising in March due to global conflicts and higher energy costs. Nitrogen-based fertilizers, which are essential for major crops such as corn, wheat, cotton, sorghum, and rice, have recorded the largest increases.
Anhydrous ammonia prices rose significantly within a few months, while urea and liquid nitrogen products showed similar upward trends.
Fertilizer production relies heavily on natural gas, making costs sensitive to changes in oil and gas markets. Even though domestic production has improved in recent years, prices continue to reflect global supply and transportation conditions.
The impact of rising fertilizer costs varies by region and timing. Farmers who purchased inputs earlier were able to avoid some price increases, while those in later planting areas face higher expenses.
Producers have limited options to manage risk for input costs, unlike crop prices which can sometimes be protected through contracts.
“These are significant increases, especially when commodity prices are flat or declining,” said Luis Ribera, Ph.D., AgriLife Extension economist and professor in the Department of Agricultural Economics. “That creates a real squeeze on profitability.”
Extension reports from across Texas show mixed farm conditions. Many regions continue to face drought, dry soils, and windy weather, while others benefited from recent rainfall. Fieldwork, planting, and irrigation are underway in most areas, though fertilizer use has declined in some regions due to cost concerns.
Economists do not expect prices to fall quickly, even if global tensions ease. Rising input costs and flat crop prices may lead to tighter margins, increased borrowing, and delayed investments for future seasons. Farmers are encouraged to plan carefully and manage inputs efficiently to navigate ongoing uncertainty.
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