Fertiliser prices climb amid challenging global outlook

Fertiliser products are becoming less affordable for farm businesses, with input prices climbing faster than most agricultural commodities.

That is according to RaboResearch, the knowledge arm of multinational agricultural banking group Rabobank.

A new RaboResearch report has revealed that global fertiliser markets have been facing another challenging year, with prices increasing due to market instability and geopolitical challenges.

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Nitrogen and phosphate-based fertilisers are forecast to be the most adversely impacted.

Bruno Fonseca, senior farm inputs analyst at RaboResearch, said: “We expect this unfavourable scenario for the fertiliser market to persist throughout the year.

“Farmers will struggle with reduced purchasing power for these nutrients, which may not immediately result in demand cuts in 2025, but the negative affordability index indicates such reductions will occur eventually.”

Discussions about the introduction of US tariffs have also influenced markets, and Rabobank expects farm businesses in the US to be hit hardest as a result.

Mr Fonseca added: “We have long cautioned that US growers will suffer the most from the newly imposed tariffs.

“Ultimately, the economics of supply and demand and the price of marginal tonnes will prove relevant.

“Over the past year or more, policy changes have led to scarcity, resulting in higher prices for US fertilisers compared to global markets, and this trend may continue in the future.”

Domestic market

Fertiliser bills for UK farmers have continued to rise so far in 2025, despite a fall in natural gas prices.

The cost of UK-produced ammonium nitrate increased by £24/t in the past two months to average £380/t delivered on farm during March. This is £41/t higher than the same month last year.

Meanwhile, imported ammonium nitrate lifted to £377/t, potash MOP increased to £341/t, and granular urea eased slightly to £342/t.

More recently, tight supplies and strong spring demand have led to shortages of some fertiliser products, putting further strain on prices.

Gabriel Odiase, cereals analyst at AHDB, said with rising fertiliser prices leading to higher production costs, UK growers may need to explore cheaper or alternative fertiliser options.

He added: “Looking ahead, if gas prices keep falling as reserves build, fertiliser prices might drop in the coming months, which is crucial for winter planning.

“However, growers need to monitor price trends closely and adjust their fertiliser plans for the long term.”