MSU Extension Farm Management

As the calendar rolls into March each year, most U.S. farmers have usually paid for or secured most of their input needs for the season. But after another year of tightened cash flow and mixed commodity prices, some farms may have held back from early input purchases. Farms in such a scenario may find themselves still needing to secure all or most of those needs heading into spring.

Purchasing inputs in the spring doesn’t mean that all price opportunities are gone. Rather, the opposite is true, especially if markets are showing possible signs of volatility for both price and supply. For farms still needing to secure inputs, the best path forward begins with staying informed about market conditions.

Understanding market conditions

Understanding market conditions is essential when buying farm inputs. The available supply of products and demand, or need, for their use initially set market prices. Prices then move up or down based on different factors that affect supply and demand. Considering factors and their impact can help determine when to buy farm inputs.

Phosphate Fertilizers

Figure 1 highlights that phosphate prices have continued to fluctuate since Spring 2021. In recent years, prices have tried to stabilize at levels similar to Fall 2021. Global supply has played a factor in keeping prices higher, despite reductions in commodity prices. A noticeable price increase was seen between the Spring and Fall of 2025, due mostly to global supply reductions and higher demand.  Despite continued supply reductions, phosphate prices began to trend downward in early 2026. By early March, the ongoing U.S./Israel conflict with Iran sparked potential supply concerns for nitrogen and potassium. Phosphate prices began to rise in response as well.

Figure 1 also highlights trends in commodity prices for corn, soybeans and wheat.  Since Spring 2022, commodities have largely been on a downward movement due to a number of market factors. The first significant shift in price trends was in Fall 2025. For some commodities, markets began to show increases for the first time in several years. Commodity market trends are helpful to understanding how expensive fertilizer is relative to the production that will pay for them.

In Figure 2, the commodity-to-phosphorus price ratio highlights the cost of phosphate fertilizers relative to corn, soybeans, and wheat prices. As fertilizer prices continue to increase and commodity prices decrease (see Figure 1), a higher ratio is calculated. A higher ratio indicates that for every bushel sold, more of its value must go toward the cost of each pound of fertilizer. Currently, phosphate fertilizer costs are some of the most expensive they’ve been during the past five-year period, a status that is unlikely to change in the near future.

Increases in fertilizer production do not happen overnight, which means that it takes time to increase phosphate supplies. In cases where countries are simply reducing exports, there needs to be an incentive for fertilizer production increases to begin. If global supply and availability continue to be a concern, phosphate costs will continue to increase as planting season approaches. Those increases could carry into the fall and even next spring depending on shifts in supply. It’s also noticeable to watch fertilizer prices in relation to commodity markets. Fertilizer cost may also rise in response to continued increases in commodity prices, based on perceptions of higher potential profits.

Nitrogen Fertilizers

Figure 3 outlines the current commodity-to-nitrogen price ratio. That ratio illustrates that nitrogen fertilizers are at some of the most expensive levels they’ve been during the past five-year period. The current price ratio for nitrogen looks remarkably similar to the price ratio for phosphates.

Nitrogen supplies continue to be reported as stable, likely due to 82% of total use for U.S. agriculture coming from domestic supplies. However, nitrogen availability to cover the remaining 18% has the potential to be similar to phosphate, especially if conflicts in the Middle East begin to directly impact production facilities in key exporting countries. If production is affected, the price ratio we see currently from domestic and seasonal demand could begin to increase again similar to Fall 2025. If global supply becomes an ongoing concern, a higher ratio could become a new norm or get worse.

Potassium Fertilizers

Figure 4 outlines the current commodity-to-potassium price ratio. Ratio changes are largely due to lower commodity prices as potassium supplies continue to be reported as stable. Similar to nitrogen, conflicts in the Middle East could negatively impact global production supplies. Of greater concern for U.S. agriculture continues to be trade relations with Canada. Over 85% of all U.S. potassium imports come from Canada. Those imports account for 97% of total potassium use in the country. With uncertainty surrounding the future of the United States–Mexico-Canada Agreement (USMCA), any changes to potassium trade will affect costs at the farm gate.

Pesticides

Market conditions are also impacted by trade relations with other countries. Trade has been an ongoing concern due to tariffs placed on countries that are agricultural trading partners. Tariffs affect the price of many agricultural inputs, including pesticides. For example, U.S. agriculture has obtained active ingredients for many pesticides through imports from other countries. In some cases, a product’s active ingredient is obtained mainly through imports, such as atrazine and glyphosate from China. North Dakota State University’s Agricultural Trade Monitor highlights that while there has been some reduction in tariffs, however, many pesticides continue to see price increases based on additional tariffs of 12% to 15% or more.

As the growing season continues and more news hits the airwaves, understanding market conditions will be essential to buying all inputs, not just fertilizer and pesticides. Knowing which inputs may be the most expensive is only part of identifying your farm’s potential future needs.

Identifying input needs

Another consideration is your farm’s crop plan. Even now, many farms are finalizing what they will plant this year. If that plan is to become reality, there are several questions you’ll want to have answered:

• Are any soil samples out of date? Soil sampling is critically important to identifying remaining fertilizer needs. You need to know what you’ve got to work with before considering any other decisions. Pesticide use is also impacted by your soil and its overall health.
• What products are needed in higher amounts? Targeting large purchase products first maximizes your use of cash to secure them.
• When can you begin to purchase, and are there any minimum quantity requirements? More purchases, with smaller quantities, are recommended to spread potential risk.
• Once you can begin to buy, what cash do you have available? Working capital, operating loans and production left to sell may offer tradeoffs to consider.
• Do you have on-farm storage? Don’t be afraid to use product storage if early-sale opportunities become available. Physical possession means input needs are met.
• Do you have all of your seed or transplanting needs secure? Planting intentions can change heading into spring and may require additional plant materials. Securing replacement seed or seedling plants isn’t just about putting them on order.

To help weigh product options, consider utilizing decision tools offered by MSU Extension. The Pesticide Cost Comparison Decision Tool for Field Crops and Pesticide Cost Comparison Decision Tool for Vegetables help consider different products and their costs as you plan your IPM strategies. The Fertilizer Cost Comparison Decision Tool for Field Crops helps identify how to meet your nutrient needs at the lowest cost possible. There are also versions available for forage, fruit and vegetable growers.

Create an input purchasing plan

An input purchasing plan takes your crop plan and adapts it into an efficient buying strategy. Even in spring, buying strategies can help to obtain products at affordable costs. Borrowing from grain marketing concepts, input purchasing focuses on being intentional and proactive about buying decisions. Learn more about input purchasing plans.

MSU Extension Bulletin E-3508: Strategies for Purchasing Farm Inputs

Further information on these concepts can be found in MSU Extension Bulletin E-3508: Strategies for Purchasing Farm Inputs. The bulletin offers insight into strategic approaches to buying farm inputs and explores how to secure products at reasonable prices by creating an input purchasing plan.