GREAT FALLS — Fertilizer prices are starting to come back down after shipments out of the Strait of Hormuz started moving again, easing some of the pressure Montana producers were watching closely.
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For farmers, the movement is welcome news, but the price swing also shows how quickly global events can affect the cost of growing a crop in Montana.
Steve Sheffels, president of the Montana Grain Growers Association, said producers may have more fertilizer available than they first expected. Part of that, he explained, may be tied to periods of drought across the Midwest, where some farmers may not have used as much fertilizer this spring because dry conditions limited crop potential.
“I think because the U.S. didn’t use as much fertilizer this spring as they expected to, that the situation is not as dire as predicted,” Sheffels said. “And unfortunately, that’s because a lot of farmers haven’t gotten the rain.”
Sheffels said urea fertilizer in the Golden Triangle had been around $850 a ton at its height. Now, he said, a ton is closer to $600, about where it was before the disruption.
“Nobody could believe that it turned around that quickly,” Sheffels said.
Dr. Andrew Swanson, an MSU Extension farm management specialist, said the broader fertilizer market has seen a similar swing. He said Gulf Coast urea prices started around $350 to $400 a ton before the conflict, rose to almost $800 a ton, and have since come back down to a little above $400 to $450.
“We’ve been on this huge roller coaster over the last kind of two months or so, three months or so throughout this Hormuz war,” Swanson said.
He added that those broader market changes do not always reach local prices immediately. In Montana, he said, prices did not quite double, but they did increase by about $200 to $300 a ton in recent months.
“It’ll probably start to come down now as these tensions subside, but it’s going to take a little bit longer,” Swanson said.
The assistant professor explained that local suppliers are still watching inventory and planning for the next growing season. He added that they also have to consider whether tensions could flare up again and affect supply.
That matters because fertilizer is only one part of a farmer's budget. Sheffels said lower fertilizer prices help, but grain prices have also dropped from where they were during the peak of the uncertainty.
“Within this kind of four-week window right here is usually among the highest prices for the year," he explained. "Then it starts going down at harvest time just because the supply goes up."
Swanson added that is part of what makes farm planning difficult. Fertilizer, wheat, gasoline and diesel all move through global markets. That means a disruption overseas can affect what a producer pays in Montana.
“The big thing is that all these commodities, whether it’s wheat, gasoline, diesel, fertilizer, it’s a global market,” Swanson said.
Sheffels said consumers can understand that volatility through fuel prices. When global events affect oil markets, consumers see it at the pump. But for farmers, he said, a fertilizer spike can hit a much larger part of the budget.
“Our fertilizer price bump, if that were to have been sustained, that would be, you know, 20, 30, 40% of increase in our total costs,” Sheffels said.
For producers, shipments moving again is good news. But both Sheffels and Swanson said the recent price swing is also a reminder of how much uncertainty farmers have to manage, from global supply chains to weather, commodity prices and the cost of putting in the next crop.
