Fertilizer price surge squeezes Texas producers

Fertilizer prices, which remained relatively steady early in the year, began climbing in March amid escalating conflict in the Middle East and rising energy prices, said Texas A&M AgriLife Extension Service economists.

“Fertilizer is a global commodity, so when disruptions occur anywhere, prices tend to rise everywhere,” said Mark Welch, Ph.D., AgriLife Extension grain economist and professor in the Texas A&M College of Agriculture and Life Sciences Department of Agricultural Economics.

Nitrogen costs drive increases

Nitrogen fertilizers, which are critical for commodity crops like cotton, corn, sorghum, wheat and rice, have seen some of the largest gains.

Anhydrous ammonia prices rose from about $840 per ton in late January to roughly $1,100 per ton in early April, significantly increasing per-acre costs for producers, Welch said.

Other products have followed similar trends. Urea prices have increased about 48% since the beginning of the year, while prices for urea ammonium nitrate solutions are up more than 30%.

“These are significant increases, especially when commodity prices are flat or declining,” said Luis Ribera, Ph.D., AgriLife Extension economist and professor in the Department of Agricultural Economics. “That creates a real squeeze on profitability.”

Energy, global markets drive volatility

Fertilizer production is closely tied to natural gas, making prices highly sensitive to energy markets.

Rising oil and gas prices, combined with supply disruptions and transportation uncertainty, have pushed fertilizer costs higher despite strong domestic production.

“We’re more self-sufficient than we used to be, but we’re still tied to global markets,” Ribera said.

Timing matters for producers

The impact of rising fertilizer prices could vary depending on when producers secured inputs, Welch said.

In South and Central Texas, many producers had already locked in fertilizer purchases before the latest price increases. However, producers in later-planting regions, such as Texas’ High Plains, may still be exposed to higher costs, Welch said.

“If inputs were purchased early, some producers may have avoided the worst of the increases,” Welch said. “But those still buying are facing much higher prices.”

Unlike crop prices, fertilizer costs offer limited risk management options.

“Producers are price takers when it comes to inputs,” Ribera said. “There’s very little they can do to hedge against these increases.”

Outlook remains uncertain

Economists do not expect fertilizer prices to decline quickly, even if geopolitical tensions ease.

“Prices aren’t likely to fall overnight,” Welch said. “There are longer-term impacts that will keep costs elevated.”

That uncertainty is raising concerns for the 2027 crop year, when producers may face even higher input costs from the outset. With rising input costs and uncertain crop prices, many producers are expected to face tighter margins, and potentially increased borrowing and delayed investments.

“Most producers are not at a break-even point under these costs-versus-crop price conditions,” Ribera said. “That means more debt or using savings to get through the season.”

AgriLife Extension district reporters compiled the following summaries:

Panhandle

Dry, windy conditions persisted across the district, with red flag wildfire warnings common. Soil moisture ranged from very short to short. A few late-week showers provided relief and improved topsoil moisture for small grains where they fell. Earlier-planted wheat continued heading, with reproductive stages becoming more evident. Dual-purpose wheat fields were largely grazed, and some fields were chopped for silage ahead of corn planting. Wheat diseases were widespread. In general, winter wheat conditions were very poor to poor. Pasture and range conditions were very poor to poor.

South Plains

Dry conditions and drought stress dominated the district. Rainfall was minimal, with only isolated areas receiving measurable moisture. High winds and warm temperatures further depleted soil moisture, delayed fieldwork and caused blowing dust. Producers continued field preparations for summer crops, including irrigation, tillage and herbicide applications. Winter wheat remained under irrigation, while triticale was flowering or being harvested for silage. Corn and sorghum planting was underway, and cotton planting was expected soon. Soil moisture levels were very poor, and pasture conditions remained poor, increasing reliance on supplemental feed. Some producers reduced fertilizer inputs due to high costs. Livestock were in generally good condition.

Rolling Plains

Recent storms delivered scattered rainfall, improving pasture and range conditions in some areas, though dry conditions persisted overall. Soil moisture declined again in many locations despite earlier gains. Pastures greened up, reducing the need for supplemental feeding, and stock tanks improved. Stocker cattle continued moving off wheat, while herd management progressed. Fieldwork resumed following windy conditions, including herbicide applications and hayfield preparations. Wheat conditions varied widely depending on rainfall, with some fields benefiting and others receiving moisture too late.

North

Rainfall varied widely, with western areas receiving up to 2.5 inches and eastern areas receiving lighter amounts. Despite rainfall, much of the district remained in severe drought. Soil moisture ranged from adequate to short. Winter wheat conditions were generally good, though Hessian fly damage was reported. Corn, sorghum and soybean crops benefited from recent moisture, though fertilizer use declined in some areas due to high prices. Pastures continued to improve with warming temperatures, and livestock were in good condition. Minor disease pressure was noted in small grains, and insect populations increased with warmer weather.

East

Rainfall improved conditions in many areas, though most counties remained in drought. Soil moisture was adequate, but forage growth remained slow overall. Pasture and range conditions were fair, with some counties reporting stronger forage growth. Livestock were in fair to good condition, with some supplementation ongoing. Cattle markets remained strong, and feral hog activity increased.

Far West

Dry, windy conditions persisted with limited rainfall. Soil moisture ranged from adequate to very short, with most areas reporting short to very short levels. Fieldwork continued, including planting and irrigation, with cotton planting underway in some areas and corn emerging. Preirrigation continued across the district, though limited water availability and drought were expected to reduce planted acreage. Some producers opted for planting insurance. Pecan orchards and alfalfa fields were actively managed, while small grains were in fair condition. Pasture conditions remained limited, and supplemental feeding continued. Livestock conditions were fair overall.

West Central

Recent rainfall improved soil moisture and pasture conditions, with some areas receiving significant runoff that replenished stock tanks. Conditions greened up across much of the district, though some areas remained dry. Wheat conditions improved with rainfall, though yields were expected to remain below average in many areas. Cotton planting was delayed as producers monitored forecasts. Hay and forage crops responded well to moisture. Pasture conditions improved, though parasite pressure increased. Livestock were in good condition, and market activity remained strong.

Central

Recent rainfall improved soil moisture and accelerated pasture growth. Perennial grasses and weeds responded quickly, though high fertilizer costs limited applications. Wheat advanced rapidly toward maturity, while corn recovered from earlier freeze damage. Cotton establishment remained uneven due to cool, wet conditions. Pecan trees showed strong development. Insect and disease pressure in wheat declined and was not expected to impact yields. Livestock remained in good condition, supported by improving forage and strong markets.

Southeast

Rainfall varied widely across the district, improving soil moisture and pasture conditions in some areas while others remained dry. Soil moisture levels ranged from short to surplus. Rice and corn planting progressed, with emergence underway in several counties. Sorghum planting was largely complete, and cotton planting continued. Pasture and range conditions ranged from fair to excellent depending on location. Livestock conditions were mostly good, and market demand remained strong.

Southwest

Spotty showers and a late-week cold front improved moisture conditions, though additional rainfall was needed. Pastures greened up, and stock tanks improved. Early planted sorghum and Sudan grass emerged, while cotton planting neared completion. Corn and sorghum showed some drought stress during warmer periods. Wheat and oats approached maturity. Supplemental feeding continued, and livestock were in fair to good condition.

South

Hot, dry conditions were interrupted by recent rainfall, improving soil moisture and providing relief to crops and rangeland. Row crops emerged, though late planting created management challenges without follow-up moisture. Sorghum planting neared completion, and wheat and oats approached maturity. Citrus and specialty crops benefited from rainfall, while hay production improved. Pastures greened up but needed additional moisture for sustained recovery following prolonged drought. Livestock conditions improved, though supplementation continued. Cattle sale volumes declined, and prices remained steady.