Ag Retailers Should Start Working on Their Fertilizer Plans Now
September 7, 2026 The key risk for fertilizer suppliers and ag retailers going into the fall application season isn’t necessarily fertilizer availability. It’s whether enough grower-customers have the financial capacity or lender support to make fertilizer purchases at all.
“The biggest challenge to fertilizer growth this fall is that the farmer-as-buyer is financially broken,” says Rory Olerud, CEO at AgriPartners, Clear Lake, SD. “With crop prices below breakeven, fertilizer prices at historic highs relative to grain values, and affordability indices in negative territory, the market faces a self-reinforcing cycle: High prices force farmers to cut applications, reduced demand fails to bring prices down because of high production costs, and the squeeze persists.”
In terms of how the macronutrients might perform during the 2026 fall application season in this environment, most ag retailers that CropLife® Magazine talked with expect potash to do best. Demand will be sustained by a plentiful supply of the product from trading partners such as Canada (which supplies between 80% and 85% to the U.S. annually) and the fact that prices for potash have remained relatively stable throughout 2026.
Nitrogen-based fertilizers are also expected to perform well this fall. With planted corn totals at more than 95 million acres and recent price declines in key nitrogen fertilizers, ag retailers are anticipating strong demand for products such as anhydrous ammonia in the coming months.
However, demand for phosphates is expected to be down from prior years. According to ag retailers, supplies of phosphorus products remain tight due to export restrictions imposed by major supplier China over the past few years. Coupled with this, ammonia and sulfur — both critical feedstocks for phosphate production — are being constrained by Middle East disruptions and the Strait of Hormuz situation.
“Phosphates will continue to see reductions as growers continue look to use what is left in the soil,” says Chris Behrens, Executive Vice President of Sales and Marketing at Heartland Co-op, Clive, IA. “They are not going to go back to historic rates until prices adjust or yields are considerably impacted.”
George Secor, CEO and President at Sunrise Cooperative, Fremont, OH, agrees.
“Phosphorous has so many things going against it,” says Secor. “Phosphorous application rates will be cut back so much it will be hard to make those volumes and acres up with other products. We believe for the 2026 crop year, phosphorus pentoxide applications will be around 60% of what they were two years ago. We must also consider our competition around us will be feeling the same challenges.”
Strategizing for Tough Times
Secor believes the industry must address all these challenges today, without delay.
“Retailers have a real challenge on their hands,” he says. “Retailers will not escape this agricultural tough time. Farmers are arguably in the third or fourth year of tight margins. This will come home to roost at ag retail. From what we can see retailers in Ohio are not tightening their belts and are not ready for this ride.”
Secor thinks that to survive these tough times, ag retailers need to take a closer look at many parts of their businesses. For example, he adds, Sunrise is helping its grower-customers mitigate their risk by looking at buying fertilizer and selling grain at the same time.
“My question for retailers is what have you changed in other parts of your business to make up for this loss of revenue on phosphates?” he asks. “Are you controlling expenses? Are you increasing margins in other areas? If you haven’t addressed these questions yet, you shouldn’t wait to any longer.”
According to Mark Dietsch, Sales Manager, Crop Nutrients at GROWMARK, Bloomington, IL, ag retailers also need to better manage their inventories of fertilizer given the fluid market dynamics at play in 2026.
“Ag retailers will likely take a similar approach to last year by being cautious about carrying excess inventory forward, trying not to overcommit to fertilizer purchases,” he says. “Retailers will focus on being more strategic with their buying, layering purchases over time, working closely with their customers to forecast demand, and emphasizing return-on-investment rather than just moving volume.”
The Outlook for 2027
Looking beyond the 2026 fall application season, ag retailers that spoke with CropLife believe the industry should expect more of the same for the upcoming spring 2027, with tight supplies, global disruptions, and high prices continuing to impact all aspects of the marketplace for fertilizer.
“If China continues restricting phosphate and urea exports, global prices will remain high and supply will tighten,” says Dietsch. “A long closure of the Strait of Hormuz could also prolong market recovery, keeping nitrogen and phosphate prices high. Fertilizer tariffs would also add additional costs and supply constraints for products coming into the U.S.”
Still, there have been some positive developments that could make the fertilizer situation more positive in 2027.
For example, there has been a pause on countervailing duties for phosphates from Morocco for the next several months.
In addition, commodity prices for some key row crops such as corn and soybean have begun to improve.
“Higher grain commodity pricing that would dramatically improve fertilizer affordability and grower sentiment,” says Dietsch. “If corn and soybean prices rally, the fertilizer price-to-crop ratio will improve, making it easier for growers to justify fertilizer investments.”
But AgriPartners’ Olerud cautions that no matter what happens between now and spring 2027, next year promises to present its own host of market challenges for ag retailers and their grower-customers.
“The combination of factors heading into 2027 is unlike anything in the past decade,” he says. “In 2022, fertilizer prices were catastrophically high, but corn prices were also near-record. This meant farmers had revenue to absorb the shock. In 2027, the urea-to-corn ratio reaches 174 bushels per short ton under the central Hormuz scenario — nearly three times the long-run average — at a corn price of $4.40 to $4.60 per bushel, not $7.50. Farmers [will have to] absorb the full cost increase with no commodity price buffer.”
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