Mostly Lower Fertilizer Prices, Approaching the Bottom?

Fertilizer prices are mostly lower headed into 2025. Reported Illinois prices show that anhydrous ammonia is 14% lower than in spring 2024. Additionally, liquid nitrogen (28%) and potash are lower, -10% and -12% respectively. However, producers will also notice that DAP and urea prices are higher than a year ago.

The divergence in nitrogen prices – anhydrous ammonia lower and urea mostly unchanged – may present some farm-level management opportunities. Currently, urea prices are historically high compared to anhydrous ammonia on a per-unit-of-nitrogen basis. This is to say that the urea premium is even higher today. Some producers may find switching from urea to alternative nitrogen sources appealing.

The expense for a 180-70-70 corn fertilizer rate is an estimated $145 per acre, down $17 per acre since spring 2024 and $128 per acre since 2022. While improved, the expense remains above 2016 to 2020 conditions (around $100 per acre). Higher commodity prices and yields in 2025 (compared to 2016 to 2020) offset some of the difference, but how do those factors balance out?

As a percentage of revenue, corn fertilizer expense accounts for 17% of budgeted revenue. Between 2016 and 2020, the ratio ranged from 18% to 14%. Even if the 2025 ratio fell to 15%, the expense would be $127 per acre, still above the $100 levels of recent memory.

Wrapping it up

Fertilizer prices have been a big source of dramatic swings in crop production expenses. While prices are mostly ahead of 2025, producers should not count on continued fertilizer price declines to improve their 2025 budgets. Unless commodity prices dramatically change, fertilizer prices are unlikely to adjust significantly lower. As a reminder, the last time fertilizer expenses were around $100 per acre, farm-level corn prices were at or below $3.70 per bushel.