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Fertilizer Market Report – April 30, 2025
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Fertilizer Market Report – April 30, 2025
In this week’s fertilizer report: US Urea Prices Surge to Highest Level Since 2022; Yara Q1 Results Outlook; Canadian Agriculture: Assessing our Exposure to Potential U.S. Tariffs; Diversification & Stability with Real Assets: Farmland vs. Gold; and Last Week’s North American Urea and Phosphate Price Action.
News of the Week
US Urea Prices Surge to Highest Level Since 2022
Strong spring demand, tightening supply, and new tariffs have sent NOLA barge prices soaring – up 53% since January and 38% since “Liberation Day” tariffs were announced earlier this month.
The US is now the highest-priced urea market globally, pulling cargoes from Egypt, Nigeria, and the Baltic. But with Middle East cargoes flowing to Australia and India instead – and the clock ticking on this year’s planting season – will it be enough?
April imports are trailing last year by more than half, and with affordability at its weakest since 2013, the pressure is building.
(Source; CRU)
Post | LinkedIn
Yara Q1 Results Outlook
This excerpt from the Yara Q1 Financial results outlook sums up exactly why the Genesis Fertilizers plant makes sense.
“Nitrogen markets are increasingly demand-driven, yielding positive margins also for the marginal European producer. European industry deliveries for the first quarter were up 5% compared to last year, while season-to-date deliveries are up 2%. The peak of capacity additions excl. China has passed, with IFA survey estimating production growth in 2024 to be close to zero, and industry projections showing supply growth for 2025 and onwards significantly below trend consumption growth. Combined with strong demand fundamentals, this indicates a tightening global supplydemand balance in the coming years, improving European production margins as gas prices are expected to be lower. However, Chinese export policy remains a key uncertainty factor, especially for the short-term global supply/demand balance.”
(Source: Yara)
https://www.yara.com/siteassets/investors/057-reports-and-presentations/quarterly-reports/2025/1q-2025/yara-1q-2025-report.pdf
Canadian Agriculture: Assessing our Exposure to Potential U.S. Tariffs
This is a great article from Bonnefield Financial.
In recent months, U.S. trade policy has taken center stage, with heightened rhetoric around tariffs and the potential for retaliatory actions from global trading partners. While no new U.S. tariffs have been implemented on Canadian agriculture, for investors in the space, the question still naturally arises: How vulnerable is the sector to these developments, and what are the implications for farmland investment?
Key Factors That Will Determine The Impact of U.S. Tariffs Although the full effects of potential future U.S. tariffs on Canadian agriculture are difficult to forecast, we generally expect some short-term downward pressures on commodity prices, and the actual impact will vary depending on the commodity and its reliance on the U.S. market. (We provide a more detailed analysis of key crops and export destinations later in this newsletter). Several variables will influence the outcome:
• The ability of U.S. importers to absorb or pass on tariff-related costs
• Consumer response in the U.S. and the substitutability of Canadian products
• The extent to which Canadian consumers respond to U.S. tariffs with additional demand for Canadian products
• The scope and duration of the tariffs
• Canada’s potential retaliatory measures
• Broader global supply chain shifts prompted by U.S. protectionism
Ultimately, the global nature of agricultural commodity markets provides a natural buffer from potential tariff impacts as demand displaced by one market often finds a home in another. We saw this pattern emerge when India placed barriers on Canadian lentils in 2017, and when China restricted purchases of Canadian canola in 2019. In both these cases, Canadian production went elsewhere (largely to the EU) to supply crop shortages created by China and India’s changing trade patterns
(Source: Bonnefield Financial Newsletter Q2 2025)
Q2-2025-Newsletter-How-Exposed-Are-We-to-US-Tariffs.pdf
Diversification & Stability with Real Assets: Farmland vs. Gold
I had to throw in this interesting article from Acretrader.
Farmland vs Gold: Similarities and Differences
While gold and farmland are both considered real assets, offering a tangible store of value, they possess distinct characteristics that lead to both similarities and differences in their investment profiles and potential returns.
Similarities:
- Hedge Against Inflation: Both gold and farmland have historically served as a hedge against inflation. As the purchasing power of fiat currencies declines, the intrinsic value of these tangible assets tends to hold up or even increase. Since 1928, gold has had a correlation of 0.18 with inflation while farmland values are more strongly correlated with a correlation coefficient of 0.69.
- Diversification Benefits: Both asset classes can provide diversification benefits to a traditional portfolio of stocks and bonds due to their often low correlation with these financial assets. Both gold (-0.07) and farmland values (-0.10) share a negative correlation with the S&P 500 since 1928.
- Finite Supply: The supply of both gold and arable farmland is inherently limited. The amount of gold that can be mined is finite, and the amount of productive farmland is decreasing due to urbanization and environmental factors. Since 1992, the United States has lost approximately 6 acres of farmland each minute according to USDA estimates. This scarcity can contribute to each asset’s long-term value.
- Tangible Assets: Unlike traditional financial instruments such as stocks or bonds, both gold and farmland are physical assets that can be seen and touched.
Differences:
- Income Generation: A key difference lies in their ability to generate income. Farmland, through lease income and the production of crops, can generate a recurring income stream in the form of rent or profits from direct operations. Gold, on the other hand, is a non-yielding asset and does not produce any direct income. Its returns are solely based on price appreciation.
- Liquidity: Gold is generally considered more liquid than farmland. It can be bought and sold relatively easily on global markets. Farmland transactions, however, are often less frequent and may involve higher transaction costs and longer holding periods due to the complexities of real estate.
- Management and Operational Requirements: Investing in farmland often involves management responsibilities, such as property maintenance, tenant management, or direct involvement in farming operations. However, AcreTrader has streamlined this process for investors making farmland a truly passive investment. Gold investments, particularly through ETFs or physical bullion, typically require less active management.
(Source: Acretrader)
Farmland Investing Platform | AcreTrader
North America Urea Last Week
According to Green Markets, last week, urea delivered prices in Western Canada were flat WoW at C$860/mt for the ninth week in a row.
We heard of a retail offer of C$934/mt in Southern Saskatchewan.
Urea NOLA prices were strong again, up 10% last week to a range of US$420-$482/st versus US$400-$425/st the previous week.
Direct Hedge framed up the urea NOLA market at the beginning of this week as follows: April was bid US$415 and offered $420/st. May was bid/offer US$445/$455/st. June was bid/offer US$380/$390/st. Q3 was bid/offer US$345/$375/st.
North America Phosphate Last Week
According to Green Markets, the delivered Western Canada MAP price was flat WoW in a range of C$1,160-$1,190/mt. for the third consecutive week.
MAP NOLA prices were up 3.1% WoW to US$658/st from a range of US$635-$640/st the previous week.
Industry Tidbits
- As global phosphate prices rocket to recent highs, Turkish producers are turning back to overseas markets: Post | LinkedIn
- As tariffs from U.S. and China bite, Canadian agriculture needs help: CFIB | Globalnews.ca
- Chinese tariffs: Canadian farmers cope with tariffs on canola and peas
- Goldman: Revises USDCAD forecast lower | Forexlive
- Canadian Dollar Short-term Outlook: USD/CAD Breakout Imminent
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