TFI ’25: Even with tariff threat and winter lingering, spring outlook from US fertilizer industry quite positive

HOUSTON (ICIS)–Even with potential tariffs coming in two weeks and winter looking like it wants to linger, possibly through much of February in some states, the US fertilizer industry is quite positive over the near-term direction of domestic products, especially urea.

Many participants gathered this week at the first major US fertilizer conference where the strong tone that has been developing to start the year was on full display.

The current outlook comes from the lift in near term prices and firm sentiment towards there being good consumption of the volumes already positioned as field work begins in more areas over the rest of this month.

There is also an upbeat view towards there being solid demand patterns throughout the season if inventory tightness does not impede that flow, with it widely expected that the current conditions and the arrival of the peak spring season will promote further value escalation in the short-term.

Further boosting the overall optimism is this season’s corn plantings with estimates remaining elevated and now ranging between 93 million to 96 million acres potentially.

The realization of the higher end of that projection is likely dependent on corn prices being supportive over the next several weeks and there being an early start of field work in key states.

It was expressed that the current low inventory of products, especially in nitrogen could become a limiting factor with a source saying, “we don’t have enough urea for 95 million to 96 million acres”.

That these extra sowings would cause a lift in total fertilizer consumption is not for certain.

Some of the increased acreage could be on land considered marginal for growing high yielding corn and farmers could chose to do less than they would on prime land or chose a cheaper option.

Or even count on enough nutrient carryover from the last crop.

When it came to weighing the impacts that fertilizer and agricultural interests within both Canada and the US might face with tariffs there was significant discussions over whether these measures would be imposed or would they not come forth at all.

If so, would it be implemented at the full rate of 25% or be placed at a different level higher or lower, with participants almost evenly split between their viewpoints.

Those operating in Canada or with interest in product within the country are definitely more vested in these outcomes than others in the industry and their concerns were sharper.

As one source said a large spike in values would be the most immediate hit to the markets and more than anything there is “a lot of uncertainty and it’s changed the way we are selling there”.

Some participants are also seeing US retailers becoming more cautious about their further commitments even though supply is tight for nitrogen products.

In many areas winter weather is keeping activities quite reduced and could keep the northern areas frozen a bit longer, there was still some optimism that some areas could get underway as March begins.

If that materializes that would be deemed an early start in some locations, with there being the mindset that the sooner farmers start the more time for fertilizers to be consumed.

For now, field work is only underway in the southern states in places that have been warmer and dry but that is only a small portion of what is ahead for spring applications.

It was discussed that there are some wheat inputs that have begun, and it is expected that over the coming weeks even more efforts will start where there is good soil moisture for not only ammonia but also urea and UAN applications.