Crop farmers saw profit expectations gutted this spring when the Middle East conflict spiked oil prices and pushed fertilizer costs through the roof. But farmers with on-farm storage who had locked in supplies early? They dodged the bullet — and may be positioned to capitalize on potential bargain scenarios for next year’s supplies.
“We have 60,000 gallons of on-farm storage [28% liquid UAN], so we’re usually buying in August or September for the following year,” said Chad Kemp, who grows 2,000 acres of corn, soybeans and wheat with his father, Keith, in Preble County, Ohio. “We have purchased nitrogen for next year, and it is in our tanks already. We were able to purchase for less than last year.”
According to Josh Linville, fertilizer analyst at StoneX, liquid UAN prices typically drop in summer when demand dries up.
“Seeing lower prices during the summer is normal,” he said. “It’s just a matter of how much they dip.”
Kemp’s strategy — buying dips, using on-farm storage — paid off after prices spiked. But what about farmers who don’t have that luxury?
Prebook wins, but worries linger
An April Farm Bureau survey revealed the winners and losers: Two-thirds of Midwest farmers had already prebooked fertilizer before prices spiked, while only 19% of Southern farmers did, mainly due to lack of on-farm storage and environmental concerns.
Overall, 70% of U.S. farmers said they couldn’t afford their full, planned applications this spring — a direct hit to yield potential and profits.
Peace talks and the June ceasefire triggered granular urea prices to drop 36% at the Port of New Orleans from mid-April highs, as supply concerns eased and Chinese urea returned to the market. Since then, the on-again-off-again conflict has brought uncertainty to fertilizer and fuel prices.
“If you look at grain-to-nitrogen ratio — the number of bushels it takes to buy a ton of nitrogen — it’s no secret that the ratios have been historically unfavorable to growers,” said Jason Greve, Kemp’s agronomist with Advanced Agrilytics, an independent company that serves farmers from Ohio to Iowa. “When it takes 120 bushels of corn to buy a ton of nitrogen instead of 60, you’re working twice as hard for the same input.”
How fast price relief reaches your retail terminal is anyone’s guess. It’s unlikely prices will return to normal soon.
“We cannot forget the supply damage that we have done to the global urea complex,” Linville said. “That isn’t going to be fixed overnight. With all the production and exports lost, my fear is that we will spend the remainder of 2026 and part of 2027 catching up.”
Here’s what’s certain: The fertilizer price spikes, driven by forces completely out of your control, should be a wake-up call. Now is the time to bulletproof your business plan and review the way you spend input dollars — before the next crisis hits.
Using your soil’s fertility bank
“Knowing what your fields have in them is more and more part of any economically sound decision,” Kemp said.
Even if dry fertilizer prices stay high, he knows he can delay, reduce or even skip some phosphorus and potassium applications for next year.
“We may use some of the fertility already banked up in our soil,” Kemp said. “It would allow us to cut back rates, as we haven’t cut rates in the past several years. We may let the soil bank pay us back.”
This is a strategy that only works if you know what’s in your soil — which is where precision agriculture comes in.
Kemp can consider strategic cutbacks because he works with an independent agronomist who uses data to drive precision-guided fertilizer recommendations. The Kemps approach crop farming as a system designed to “totally maximize the potential of the crop,” Kemp explained. Soil testing every three years helps guide future decisions, along with crop removal from the previous year’s yield.
“If there are spots in the field that need more, or less, we’re doing that,” Kemp said. “It’s all precision farming. We’re saving dollars, or more importantly, putting the dollars where they need to go to totally maximize the system.”
Last year, that “system” paid off: 700 acres of corn averaged 260 bushels per acre; 800 acres of soybeans averaged 73 bushels per acre; and wheat averaged 120 bushels per acre. Double-cropped soybeans averaged just over 40 bushels per acre.
Those aren’t just impressive numbers. They represent a return on every fertilizer dollar spent in exactly the right place.
But gaudy yields aren’t the end goal for Kemp or Greve, who also farms when he’s not consulting for Advanced Agrilytics.
“The conversations I’m having with farmers now is how do we gain efficiency with your fertilizer dollar,” Greve said. “It’s common for growers and industry to chase yield and drive as many bushels as possible, but what I’m after with my clients is how to maximize production while trying to be as efficient as we can with our input usage.”
Decisions made around fertilizer return on investment require data — not guesswork. You don’t want to leave bushels on the table by underapplying. But you also don’t want to waste expensive fertilizer on ground that won’t provide a return.
“More often than not, farmers could benefit by redistributing nutrient dollars to parts of a field that boost efficiency,” Greve said. That means leaning into precision farming to manage each dollar.
With a surgeon’s precision
Agronomists have done a good job integrating yield data with nutrient removal to help drive down and manage fertilizer costs.
“Unfortunately, it’s still common to say, ‘We’ve got a soil sample, we’ve identified low and high nutrient concentration, but we’re going to give this field a flat rate,’ ” Greve said.
That may work on uniform farms and soil types. But it’s rare.
Here’s how this plays out in the field: Say you harvest corn up a slope with 2% organic matter, and then transition to a draw with 3.5% organic matter. With phosphorus and potassium, 85% of nutrient uptake occurs through diffusion. And for nutrients to get to plants, water is needed. That means the 2% acre is going to run out of water well before the 3.5% acre.
“So, should we be fertilizing that 2% and 3.5% OM acre the same? Our answer is no,” Greve said. “This is where we’re trying to help drive efficiency, especially with these high-priced fertilizer markets.
“When we analyze data, I’m not thinking of an 80-acre field; I’m going down to the sub-acre, and they get managed and treated differently. We’re treating it like a precision surgeon.”
Greve acknowledged that savings vary by operation, but anecdotally, “we’ve cut 25% to 30% of fertilizer budgets following this methodology.” On a $100,000 fertilizer bill, that’s $25,000 to $30,000 back in your pocket.
2-way risk (and opportunity)
If you’re applying the same fertilizer rates to all fields, you could be spending more than you can get back in yield.
On the flip side, if you routinely harvest 300-bushel corn but use the same fertilizer rate, you could be depriving yourself of higher revenue from bigger yields next year.
You need to know the nutrient profile in any given spot in any given field.
So, you can lose two ways — or you can win two ways, depending on how you look at it.
“If you underapply — where you don’t apply enough for what the crop could potentially yield — you may get away with it in the short term,” Greve explained. “But long term, that’s going to lead to lower production and less profit. The only way to thread that needle is with good data and precision management.”
The Middle East conflict may have eased for now, but the lesson remains: Global chaos can spike costs overnight. The farmers who will weather the next crisis are the ones making smarter, data-driven fertilizer decisions today — not scrambling when prices spike tomorrow.
5 questions to ask before fertilizer purchase
Ask these five questions before buying fertilizer:
- Do I have current soil test data for every field? Without it, you’re guessing — and likely wasting money.
- Am I accounting for nutrient removal by crop? What you harvested last year tells you what you need to replace.
- Can I take advantage of on-farm storage? Buying when prices are low requires a place to store product.
- Am I treating every acre the same? Variable-rate applications can cut costs 25% to 30% while maintaining yields.
- What’s my backup plan if prices spike again? Can you delay P and K? Use soil fertility reserves? Adjust crop rotations?