Unlike 2008, the current spike in fertilizer prices is being driven by supply. “In 2008 there wasn’t an issue finding fertilizer,” says Josh Linvillle, Director of Fertilizer, StoneX Group. “If you waited a few days, you’d pay more, but it was always available. As soon as the demand falls, so does the price, because there’s no support. Right now, this situation is more supply driven. Demand had its place and it’s been part of the reason why supplies are low. If demand falls away for two to three weeks, ultimately, the market will hold. Supplies are so tight right now.” Farmers will need to watch margins closely. “We want to use the least number of inputs and produce the best output. We look at how many bushels of a crop it takes to pay for fertilizer. With December 2022 corn prices around $5.50, fertilizer prices have outpaced that and we’re worse off than we once were.”
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