Geopolitical events can send waves through the ag markets, but analysts say fertilizer often takes the hardest hit.
“Absolutely, it’s exciting that somebody’s looking more global than just at home, because that’s what we need to do, right? We need to consider what’s happening halfway around the world. So, we’ve seen a lot of escalation when it comes to the Russian-Ukraine situation. Earlier this week, Ukraine started using U.S.-produced missiles, which Putin has often said that is going to be seen as a major escalation. Ukraine did that, and overnight, we saw Russia respond with another missile attack involving ICBMs. That’s a scary, scary situation,” said Josh Linville.
Linville says if the war between Russia and Ukraine escalates, it could have serious consequences for farmers looking to make fertilizer purchases.
“We have to start looking forward and say if this continues to spiral a lot of control, what does that mean for Russian exports? And when you look at Russia, they are incredibly important. They are either the top urea and UAN, they are the biggest exporter in the world. Anhydrous, historically, they’re the biggest exporter. They have it because they’ve lost their export ability, which went through Ukraine, historically speaking, Phosphate is the fourth-biggest. Potash is the second-biggest, and so we got to start wondering, what happens if, all of a sudden, those exports stop?”
Most fertilizer prices have been on an upward trend since last month. DTN found potash was the only major fertilizer to see a price decrease, but only slightly. Despite the climb, all fertilizers except MAP and DAP are lower than this time last year.
