I will say this now and will say it going forward to eternity: these are the flat price graphs for each individual location. Your price where you are is going to be different. There are logistics. There is the cost of storage/interest/insurance/etc. These graphs should not be taken as "it shows the price at $700, why isn't my price $700". These graphs should be used to give an appreciation for price movements.
All values are in metric tons and USD currency.
Global
For anyone that was hoping for a phosphate miracle in the form of Chinese exports returning...sorry.
China's March export data showed another disappointing month. DAP/MAP exports barely got over 111K tons. How does this measure? The current 3-year average March cumulative total is just under 785K tons...but that is deceiving. If we go back to normal times (2021/22), the 3-year average thru March was 1.3M.
On the demand side, India is still struggling with today's new normal of tight global supplies. They continue to try and persuade the market with tactics that used to work but in today's world, have much less impact. As a result, stockpiles continue to be much lower than normal which means the largest global buyer is still in catch up mode.
What does all of this mean? Normally, as the world heads into the summer months (for the Northern Hemisphere), global phosphate values fall to near their annual low's. This year so far appears to be bucking that trend.
Assuming Chinese exports remain low and India continues to buy at a frantic pace, it is hard to see values falling. The biggest bearish factor is how global buyers will react to the current extreme high price...but for some they have few options. This is a dream world for manufacturers.
North America
For most, spring phosphate demand/application time has come and gone. Now, the N.A. market is sitting back and looking to the summer in hopes of typical annual low's...but things do not always follow seasonal patterns.
We have heard from several that there has been demand destruction for phosphate this spring. Anywhere from 5 - 15% cut backs. Normally, that would mean more ending inventories that weigh on price ideas...but keep in mind that we boosted corn acres a lot. We started the year at 92M and have steadily risen. The USDA put their number at 95.3M. Lots of folks are forecasting it over 96M now. Even if demand cuts back, the additional acres should mean that ending inventories are very low.
Then we have to contend with a world situation where the S&D is completely out of whack due to China/India. That still matters...even though we have made it very difficult on the 4 largest exporters in the world (China/Russia/Morocco still have counter vailing duties, Saudi Arabia now has tariffs).
Current high values likely means that buyers will be VERY skeptical and slow to spend money for fall inputs...but the current global situation may make that point irrelevant. If the world is truly as messed up as it seems, even if N.A. buyers say no to purchase opportunities, exports may be just as good a value...if not better.
If conditions do not change, it is very hard to see substantial weakening of prices.
...don't shoot the messenger...
List of new global production continues to grow
"Low prices cure low prices and high prices cure high prices."
From my early days in the fertilizer markets, this was a tried and true golden rule of not only fertilizer but markets in general.
When prices fall to very low prices, the market corrects itself. The highest cost manufacturers struggle as they are either barely breaking even or are losing money. The common response is to slow/stop production. Why continue if the market forces are creating a loss for your operation. The drop in supply eventually causes market values to rise.
The opposite holds true for the higher side...albeit at a slower pace. A very high price causes current market participants or new market entrants to create more supply either in the form of higher production rates or new production lines.
It appears that phosphate is going the route of more production to solve high prices.
There has been a growing list of rumored/announced new production lines in the world of phosphate:
- Australia - a firm appears to be moving forward with a new mining/production facility that would add approximately 1M tons of phosphate per year. Likely these tons stay home in Australia, but still benefits the world by reducing their import needs.
- Morocco - OCP, Morocco's phosphate production company, is proceeding with new lines that will focus on TSP. This is a much less popular product globally...but is still phosphate. If OCP can build new demand for TSP, that will reduce those areas demand for DAP/MAP, freeing up that product for other global buyers.
- Saudi Arabia - it sounds as though they are going forward with their 3rd phase of phosphate production. Details have been few, but hopefully real nonetheless.
- Norway - there was a huge phosphate rock reserve discover made in Norway and it sounds as though they will charge ahead with developing the area.
On top of these, there continues to be hope that U.S. production rates will return to their normal 80 - 90% range (Q4 '24 was set at 58%).
Fortunately, if/when this list of new tons start to become reality, they should add much needed supplies to a world that is begging for them.
Unfortunately, that is going to take time. Expanded/new production does not happen overnight. These types of situations do not take months, they take years.
For the short term, from my vantage point, we have to keep watching China. Their exports remain dismal and continue to help support global phosphate prices. If they were to return to full, normal export rates, current global values would likely be a thing of the past.
For now, this list of new/expanded production acts as a light at the end of the tunnel...a very long, dark tunnel.
What does this mean for farmer?
This is a very good and very positive situation for buyers/farmers/etc...eventually.
The good news is that even if just some of these expansions happen, it will be more supply than is currently available. More supply that outpaces demand should help lower price ideas.
The bad news is that none of these will be online short term. These projects take time so for the short term, the world is still reliant on the Chinese export story.
Still, given how bad phosphate has been, we will take any small victories we can get.
China's March export data shows lowest ever shipped for world's largest
Normally, China is the world's largest phosphate exporter, sending between 9 and 10M tons per year to the world.
We are not living in normal times.
For the last few years, those exports have shrunk.
- 2021 - 10M tons
- 2022 - 5.6M tons
- 2023 - 7.1M tons
- 2024 - 6.6M tons
Why? Remember where the markets were in 2022. Global values skyrocketed. NOLA DAP, for example, hit $1,000 for the first time since 2008. Demand was high as grain prices skyrocketed. Supplies got tight.
And the Chinese government intervened.
From my uneducated POV, a communist governments most feared group is not an outside force. Rather, it is an uprising from within. Who is one of the largest blocks of people in China? Farmers.
Like urea, the government decided to take steps to intervene. Rather than allowing full exports, restrictions started to be put into place to limit the number of tons that flowed to the world. In doing this, domestic supplies rose well above sufficient levels and domestic prices fell vs the world. Both of these were HUGE for Chinese famers...and helps keep that large block of people happy.
Unfortunately, the rest of the world pays the price.
There has been lingering hope that the Chinese government would loosen these restrictions...but that has not been the case. 2025 has not started well with only just over 111K tons of DAP/MAP exported in the first quarter.
Now, there are still 9 months for them to catch up...but it is not looking promising so far. We have not seen/heard anything that leads us to believe an immediate return to form is coming. In fact, some have theorized that the government will loosen the restrictions any day now...but it will not matter as Chinese manufacturers do not have the supplies available to export and it may be June or after before they do.
If Chinese exports come back to 100%, it will be a huge bearish event for the world...I just wouldn't hold my breath on that happening right now.
What does this mean for farmers?
Unless you farm in an area where your government restricts price movement, this matters to you.
China is typically the world's largest exporter. When they scale back like they have been doing, it hurts the world. No matter how close or far you are, this matters and is a big reason I always advise keeping an eye on the world.
Hopefully we will see them return to form in the coming months...but there are no guarantees.
India continues to struggle with the current phosphate market
The Indian phosphate market hasn't been a story. It has been more a soap opera.
Since last summer, the government has been struggling with its phosphate approach. For a bit of back story, India does not do fertilizer like the rest of the world in that farmers are not subject to global price volatility. Their price stays flat due to government intervention. In order to keep the price flat but still ensure enough imports flow, the government subsidizes importers the difference.
As you can imagine, for a country that imports millions of tons per year, this can be costly.
Last summer, global values were sliding. It had appeared that China was returning to normal export flows, the calendar was moving toward its typical annual low price period, and buyers were finally smelling blood in the water. India joined into the fray. It was voted and approved that they would reduce the subsidy rate in an effort to further pressure values. If global supplies were plentiful and prices were already weak, their reducing the subsidy rate would mean importers had to buy at lower prices to make it work. The hope was that global sellers/manufacturers would accept the lower netbacks.
They likely would have...if China didn't do an about face.
Suddenly, Chinese exports slowed down as the government put further restrictions in place and the Indian government was slow to respond. As 2024 progressed, the global markets did not turn around and as a result, imports slowed dramatically to the point that domestic stockpiles became a story. The largest voting block in India is farmers...and they do not take lightly to low stockpiles of phosphate. In later 2021, stockpiles were allowed to drop to severely low levels and farmers started to riot. This is how serious they are! The government does not want to lose power and their largest voting block is farmers, so it makes sense they want to keep them happy. While imports have been just good enough to keep from repeating that period, they remain very low and in need of faster flows.
But the world is making them pay and they are sick of it.
At the end of March, India continued to buy phosphate where and when it could...but prices continued to rise:
End of March - $640's CFR
Early April - $660's to $670's CFR
Mid-April - $680's to $690's CFR
Late April - $700 CFR...then the shocker.
Not long after $700 CFR was locked up, a reported purchase of $750 CFR was made...and that was the last straw from the government who was tired of paying what they saw as outrageously high prices. The brakes were set and set hard. It was questioned whether they would honor the $750 contract. Guidance was given that they would not support anything higher than $675 CFR.
And that is where we sit today...at a crossroads.
Path 1 - the world holds on higher prices and forces India's hand - India cannot wait on their new strategy forever. Eventually, they have to start bringing in supplies or face the wrath of their population. If global manufacturers/suppliers can hold out long enough for India to break, they should be able to name their price...which means the rest of the world has to deal with the same.
Path 2 - the world succumbs to India's "demands" - there is a chance global manufacturers look at the $675 CFR price and think "that is a pretty good number where we make a lot of margin. Maybe we just sell it and not rock the boat." I'm less optimistic this happens, but I think there is a chance. Phosphate manufacturers are doing really well right now on margins and we are moving into a slow demand period (even worse with prices as high as they are). If they drop for India, they may do the same for the rest of the world.
Unfortunately, at this time, I'm not sure where this goes but it remains a high watch point as it can/will have global ramifications.
As always, events halfway around the world matter to you regardless of where you farm.
What does this mean for farmers?
If India continues to buy at a fairly rapid and constant rate, then that should provide a lot of confidence to global manufacturers/exporters/suppliers that they can keep price ideas up and/or go higher.
If they can sell India at steady to higher prices, why would they ship it anywhere else at a cheaper rate?
As India continues to support the global phosphate market, it will support any domestic market out there.
N.A. values remain firm...questions rising on if there will be a summer "reset"
To say that current N.A. phosphate values are high would be an understatement. The flat price is historically high but what is worse, the phosphate price in relation to grain values are extremely high. Corn, for example, is setting the highest ratio value that has been seen since 2008 for this time of year. What this means is that not only are farmers paying a high price, but they are spending FAR more bushels of corn/beans/etc. than what is considered normal.
It has to get better, right?
Not so fast...
Remember, do not shoot the messenger.
As you read above, the world of phosphate is struggling. Chinese exports are extremely low. India, the world's largest buyer, is still in a bit of catch up mode. Basically, the global S&D is in shambles that supports pricing.
Domestically, lets assume that buyers say absolutely not to buying anything close to current values which I think is HIGHLY likely. Farmers are going to say no because 2025 profitability is not good, 2026 outlook isn't much better and a lot of cash reserves have been burned thru. Retailers, as a result, are going to say no to position taking. They know their farmer customers are struggling. They also know there is a tremendous amount of price risk (along with interest costs) in these values. They cannot withstand that type of risk and will likely drag their feet.
That should mean lower prices!!! Well, if it were normal, I would agree.
Unfortunately, remember the world situation. Globally, supplies are tight and demand has been solid. If that continues and there is no domestic demand, we could see exports ramp up. At the end of the day, sales need to be made and positions cleared.
Let me be very clear: this all assumes that the current POV holds true. This all assumes the global situation remains as dire as it is today. This all assumes India continues to buy and China continues to restrict exports. This is all being said in late April when there is still 6 months before the fall application season.
There is a LOT of time between now and the fall. Please do not read any of this and think "oh, Josh is saying I should lock in everything I need". All I am trying to do is lay the groundwork for the current market POV. Things can and likely will change between now and then.
This market POV is only being shared to give you context into what is going on in the background of the marketplace. My hope is that this POV is dead wrong and prices go into freefall, creating a great buying opportunity.
...I just struggle to see that today...
What does this mean for farmers?
Today, it doesn't mean anything. There is a lot of time between today and fall application. That is a lot of time for the market to change, correct, show a purchase opportunity, etc.
However, the China/India situation may drag on and force the market to make very hard decisions.
There is no need to do anything hasty today. This is merely to show where things are so that in the future if we have to have a harder conversation, we are all more prepared.
NOLA/New Orleans, Louisiana DAP price comparison
Number 5 global exporter in 2022
Price comparisons
Vs 30 days ago - 6% or approximately $35 higher
Vs 90 days ago - 11% or approximately $65 higher
Vs 6 months ago - 11% or approximately $65 higher
Vs 1 year ago - 33% or approximately $160 higher
U.S. Midwest Average (using multiple points across Midwest) price comparison
Vs 30 days ago - 0% or approximately $0
Vs 90 days ago - 69% or approximately $104 higher
Vs 6 months ago - 391% or approximately $203 higher
Vs 1 year ago - 51% or approximately $86 higher
U.S. Northern Plains Average price comparison
Vs 30 days ago - 0% or approximately $0
Vs 90 days ago - 4% or approximately $25 higher
Vs 6 months ago - 10% or approximately $57 higher
Vs 1 year ago - 1% or approximately $4 higher
U.S. Southern Plains Average price comparison
Vs 30 days ago - 2% or approximately $15 higher
Vs 90 days ago - 7% or approximately $44 higher
Vs 6 months ago - 6% or approximately $38 higher
Vs 1 year ago - 6% or approximately $36 higher
Morocco DAP price comparison
Number 1 global exporter in 2022
Price comparisons:
Vs 30 days ago - 8% or approximately $53 higher
Vs 90 days ago - 13% or approximately $78 higher
Vs 6 months ago - 12% or approximately $75 higher
Vs 1 year ago - 20% or approximately $113 higher
Black Sea DAP price comparison
Number 3 exporter of DAP/MAP in 2022
Price comparisons:
Vs 30 days ago - 5% or approximately $28 higher
Vs 90 days ago - 9% or approximately $56 higher
Vs 6 months ago - 10% or approximately $58 higher
Vs 1 year ago - 19% or approximately $102 higher
India DAP price comparison
Number 1 global importer in 2022
Price comparisons:
Vs 30 days ago - 7% or approximately $47 higher
Vs 90 days ago - 10% or approximately $62 higher
Vs 6 months ago - 9% or approximately $58 higher
Vs 1 year ago - 32% or approximately $170 higher
China DAP price comparison
Number 2 global exporter in 2022
Price comparisons:
Vs 30 days ago - 6% or approximately $35 higher
Vs 90 days ago - 7% or approximately $45 higher
Vs 6 months ago - 9% or approximately $55 higher
Vs 1 year ago - 27% or approximately $143 higher
Saudi Arabia DAP price comparison
Number 4 global exporter in 2022
Price comparisons:
Vs 30 days ago - 7% or approximately $46 higher
Vs 90 days ago - 12% or approximately $73 higher
Vs 6 months ago - 9% or approximately $54 higher
Vs 1 year ago - 30% or approximately $157 higher
Brazil DAP price comparison
Number 2 global importer in 2022
Price comparisons
Vs 30 days ago - 6% or approximately $40 higher
Vs 90 days ago - 10% or approximately $65 higher
Vs 6 months ago - 10% or approximately $65 higher
Vs 1 year ago - 24% or approximately $135 higher
- Chinese exports remain dismal – I do not care what corner of earth you read this from, when the world's largest exporter pulls back like China has done, it is felt. With some speculating that they may not return until June...if at all...this should continue to boost price ideas. That affects everyone.
- India continues to catch up – having the world's largest supplier pull so far back is bad. Having the world's largest buyer be behind on imports/low on stockpiles is baddererer!! To me, China is the cause but India continues to be the situation that proves the scenario. Normally, as we move into May and beyond, a lot of demand falls off. If India continues to buy, there is no reason for typical seasonal price patters to happen.
- N.A. buyers care more about supplies than price – what I mean by this is that buyers are not turned off by the high price of phosphates. I'm fairly certain that as we move into summer, fill programs are not likely to drop much from current values (assuming global situation remains). If/when buyers scream absolutely not, the market very well may see strong export opportunities. If buyers turn around and say "OK, don't export it, we will buy it", watch out...
- China returns – is this expected today? No, but it is certainly possible. The fertilizer road is littered with folks saying "China WILL do this" or "China WILL NOT do that". As soon as you think you have a read on the country, they do the exact opposite. Today, the view is that China will not return to exporting until the 2nd half. That helps to prop up price ideas...which means if China does a 180 and starts exporting heavy, watch out for the downside price scenario.
- N.A. demand completely shuts down – if prices do not do anything different than what they are right now, I think this is an extremely possible scenario. Who is going to be excited about locking in these values? 2025 is not great for farmer profitability. 2026 isn't great either. Phosphate values are extremely high and grain prices are not supporting them. Retailers will know farmers want nothing to do with it and will take a similar stance. This "could" pressure the market if enough hold off and say no. That also assumes export opportunities do not exist.
- Global manufacturers are content to sell current values than to risk higher – India is trying to force the global markets hand by setting a $675 CFR price limit. Their hope is that the world will decide that is a solid price/margin and proceed. If, and that is a big if, the supply side goes that route, it could keep values tamped down. I'm not expecting this, but it is very much a watch point.
We believe that only looking at the flat price of either grains or fertilizer can be misleading:
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Only selling grain can hurt you if fertilizer prices rise substantially
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Only buying fertilizer can hurt you if grain prices fall
We look at the ratio "value" to get a better indication of where we are or how many bushels of X does it take to pay for 1 ton of fertilizer.
Would you rather:
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Spend 150 bushels to pay for 1 ton of DAP
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Spend 80 bushels to pay for 1 ton of DAP
When we compare the current ratio value against recent years, we start to see if we are high or low.
YOUR VALUES MAY LOOK DIFFERENT
This graph looks at the NOLA DAP price vs the flat grain price. There are no logistics on either product. Your location will look different due to fertilizer logistical costs, grain basis, etc.
- Chinese export flows - easily the most important focal point heading into May. China is tightening the global S&D in a way that I have never seen. We have seen higher prices (2008), but that was largely driven by demand. When 2008 demand stopped, prices plummeted. That is a key trait of a demand driven bull run, it rings hollow. This current run is a supply driven situation meaning it has a lot more staying power...and China is holding the keys.
- Indian imports flows - if it were only the China story, we could see things going quiet in the coming weeks/months. Sure, the lack of Chinese exports hurts global supplies, but without buyers to prove the story things could go quiet. Unfortunately today, it appears India needs to continue buying to rebuild stockpiles and prepare for their next season. Their approach should continue to tell and prove the tight supply story.
- Global/domestic buyers reaction to higher prices heading into summer - the global supply situation may be the worst ever seen, but buyers may not care. If the numbers do not work, retailers/farmers will push back. There are 6 months before the start of widespread fall application. Why lock in horribly high priced material that far in advance? My guess is most will wait and some may contemplate reducing application rates or delaying their application to winter/spring. This may not change the global S&D story, but it will have an impact.
StoneX Ratio Calculation
The ratio calculation is derived from Bloomberg historical grains values as well as fertilizer values from StoneX, NPKFAS, and Argus.
The calculation is simply dividing the fertilizer price by each grain price.
All data was sourced from StoneX unless otherwise noted.
