What’s Really Driving Your Fertilizer Bill? StoneX’s Josh Linville Explains

What’s Really Driving Your Fertilizer Bill?

With tight margins and higher diesel prices, fertilizer costs are a top concern for Illinois farmers. On the latest episode of IL Corn TV, Collin Watters, IL Corn’s Director of Exports and Logistics, sat down with Josh Linville, Vice President of Fertilizer at StoneX, to talk about what’s behind those prices and what could bring them down.

It’s a global market

Linville’s biggest message: look past the back window. “Our grain markets are driven by global markets. Our fertilizer markets are driven by global markets,” he said.

For nitrogen and phosphate, that means the Strait of Hormuz. Ongoing disruptions in that narrow waterway have kept prices high all year. Farmers who watched the situation closely bought earlier. Those who didn’t watched prices keep climbing.

Even the suspension of duties on Moroccan phosphate this summer hasn’t brought relief. Linville says prices have actually risen since the June announcement, because U.S. phosphate was already among the cheapest in the world. For potash, the key is keeping a good trade relationship with Canada.

Fewer players, less leverage

Consolidation has left many farmers with only one or two local retail options. At the manufacturing level, Linville notes that a handful of companies control most of the nitrogen market. This year, when anhydrous and UAN fill programs were announced, competitors had nearly matching prices within 30 minutes.

That concentration also makes it risky for buyers to speak up. “You lose the relationship in an industry that has very few relationship opportunities,” he said.

The long-term fix

Price transparency helps, and CME fertilizer futures already offer daily settlements. But Linville says the real solution is building more U.S. nitrogen production. The U.S. has the natural gas and the demand. What’s held it back is the high cost of new plants, a lack of incentive for current players to expand, and regulatory red tape.

For phosphate, he recommends long-term supply partnerships with countries like Morocco, Norway and Saudi Arabia. For potash, it’s staying on good terms with Canada.

Watch the full conversation on IL Corn TV