Why Fertilizer Prices Could Remain High Into 2027

Why It Matters

Persistently high fertilizer costs erode farm margins, threaten food‑price stability, and reshape trade flows, prompting policy and supply‑chain adjustments worldwide.

Key Takeaways

• Phosphate prices projected above $1,000 per ton through 2027
• Strait of Hormuz closure could cut 0.8 M tons monthly
• U.S. export arbitrage emerges despite countervailing duties
• Australia’s urea price hits ~USD 610/ton, 57% YTD rise

Pulse Analysis

The latest Rabobank outlook underscores a structural shift in the fertilizer market, where geopolitical risk has become a primary price driver. The ongoing conflict between the United States, Israel and Iran threatens the Strait of Hormuz, a chokepoint for roughly 0.8 million metric tons of fertilizer each month. If the waterway were to close, supply shortages would tighten global markets, pushing already elevated phosphate and nitrogen prices even higher. This risk premium is reflected in the 18‑year low affordability index, signaling that growers worldwide must allocate a larger share of their budgets to inputs.

In the United States, the debate over countervailing duties (CVDs) highlights the tension between protecting domestic producers and ensuring competitive pricing for farmers. While eliminating CVDs could lower U.S. fertilizer costs, analysts note an emerging export arbitrage opportunity: U.S. phosphates can still be shipped profitably to Brazil despite a global scarcity. This dynamic suggests that policy changes alone may not fully alleviate price pressures, as market fundamentals continue to favor exporters with access to cheaper feedstock.

Internationally, the ripple effects are evident. Brazil, a major fertilizer importer, is scaling back purchases after a record‑high import year, while Australia faces a 57% year‑to‑date rise in urea prices—roughly $610 per metric ton after converting from 915 AUD. Meanwhile, China’s relative self‑sufficiency shields it from the worst of the shock, and Europe is considering tariff reductions to ease nitrogen costs. Together, these trends point to a prolonged period of volatility that will shape planting decisions, commodity pricing, and trade flows well into 2027.