The Outlook for Fall Fertilizer: ‘Moderately Optimistic’
September 8, 2022 
In general, ag retailers foresee a good fall season when it comes to fall fertility – providing too much else doesn’t get upended by unexpected circumstances.
Thus far, the 2022 crop nutrient season has been one heck of a rollercoaster ride for ag retailers and their grower-customers. In addition to dealing with serious supply shortages and stubbornly high prices, uncertainty on the global stage — affecting key fertilizer sources such as Russia, China, and Ukraine — added new levels of stress to the marketplace throughout the spring application season.
Through hard work and expert planning, the industry successfully managed to navigate all these rough waves during the first half of 2022. Now, the question becomes how will the fall 2022 season play out?
Based upon the evidence, the view is a somewhat mixed. According to Steven Page, General Manager, EDC Ag Products Co., Rockwell, TX, his company’s outlook is positive.
“Our organization is bullish on fertilizer sales for fall 2022,” says Page. “With the combination of higher-than-expected commodity pricing and downward trending fertilizer prices, end-users will be looking to replace nutrients that were used from the soil bank in the 2021-22 crop year.”
Mathew Taylor, Director of Fertilizer Procurement for Nutrien Ag Solutions, Loveland, CO, agrees with Page. However, he can see at least one potential negative for the 2022 fall fertilizer application season as well.
“Optimistic would be how I would view it,” says Taylor. “There is a lot of positive things going on from a grain commodity pricing that leads me to believe that we will have a good application season as long as we get the window to apply. Small bit of negativity still around supply chain issues and what is going overseas. But from a grower’s perspective in the big corn and soybean markets, it’s positive.”
Still, other ag retailers aren’t as positive in their fall 2022 outlooks right now. However, says Joe Kilgus, Director of Sales & Marketing Crop Nutrients, GROWMARK, Inc., Bloomington, IL, this could change, given the right conditions.
“[We are] slightly negative,” says Kilgus of the company’s fall forecast. “High prices proved demand destruction was real last year and could continue at these elevated price levels. Risk is higher for everyone in the channel and farmgate economics have soured with the recent downturn in commodity prices. That said, the conversation of global food crisis continues and could quickly change the commodity outlook.”
Kilgus adds that grower-customer attitudes towards fall application, along with more unexpected market challenges, could also alter this view. “[We could see] pricing/demand destruction,” he warns. “Barring any black swan events, the available supply quickly caught up with demand after planting. The biggest challenge will be if growers feel compelled to make applications this fall. The system needs them to in order to spread the work across fall and spring. If grower sentiment is that it may be advantageous to wait, the system could be challenged to meet the demands in a compressed window.”
Nic McCarthy, Senior Vice President for Central Valley Ag (CVA) Coop, York, NE, also points to weather as a potential challenge for this fall season’s success. “We have had two of the best fall application windows in 2020 and 2021 falls,” says McCarthy. “Each year, we were still pulling anhydrous ammonia (NH3) in December and put dry fertilizer on most of the winter months. We could see prices curb some rates, but for the most part, the shock of price has settled.”
The Macronutrients Outlook
So, given these variables, which macronutrients are likely to perform best this fall fertilizer application season? According to EDC’s Page, the current market favors phosphorus. “Prices have moderated and continue to moderate,” he says for phosphorus. “End-users know they have used up the phosphorus in the ‘soil bank,’ and they should have some cash that needs to be spent.”
Meanwhile, GROWMARK’s Kilgus thinks another macronutrient will get the majority of attention of grower-customers this fall. “Potash tends to fare the best,” he says. “It is unlikely folks would skip two years in a row if they took off decent yields. The global supply is constrained, and programs tend to be seen as more stable throughout the channel.”
On the flipside, Kilgus believes nitrogen fertilizers might have a harder time this autumn. “Buyers may struggle to get confident with a NH3 premium vs. international urea,” he says. “Sellers will point to European energy dynamics and export options.”
Still, according to Nutrien’s Taylor, the fortunes for all macronutrients this fall could mirror one another. “I don’t know if there is one category of fertilizer that will outperform the others as it looks today,” he says. “NH3 pricing looks to be in line with expectations from a grower perspective, and at an advantageous price to put out this fall. Phosphorus and potassium pricing continues to drift from spring pricing, so believe this will give growers a sign to apply what they traditionally buy for fall application.”
Looking Ahead to 2023
Following all the black swans and market challenges that have cropped up during the 2022 growing season for ag retailers and grower-customers in regard to fertilizer, most ag retailers anticipate this will led to some significant marketplace changes going into the 2023 season on how business is conducted in this area. In fact, according to EDC’s Page, inventory costs will be something ag retailers continue to look at much more closely going forward. “I see more forward contracting opportunities of inputs for end-users available because retailers will want to secure that inventory investment,” he predicts.
GROWMARK’s Kilgus agrees. “I anticipate folks will be more risk-off,” he says. “Many remember 2008-09, when we moved off record high prices. I expect the industry will go back to a more structured approach to commitments at the farmgate.”
In his mind, Nutrien’s Taylor thinks that ag retailers will increasingly embrace a new way of effectively managing their crop nutrients businesses — understanding.
“Understanding new trade flows on all products and when to have supply is something we are forced to review constantly,” he says. “With all the political issues going on, trade flows and supply expectations from suppliers have totally changed. Understanding new lead times and the changes suppliers and producers have made in their supply chains will be very important. We continue to see increased freight, demurrage, river issues, etc. These issues have always been disruptors but now are MAJOR disruptors to how retailers have bought in the past. Understanding forecasts from a grower level is something we continue to put more focus on, this year and going forward.”
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