Fertilizer Markets and Finance

Steve Georgi is playing chicken with the world’s biggest fertilizer makers.

The Indiana corn grower has postponed buying the fertilizer he needs for spring planting for only the second time in 35 years, angry that prices for key nutrients surged more than one-third in the fourth quarter.

“I haven’t bought anything yet,” said Georgi, who normally makes his purchases around the beginning of the year. Prices are so high “it’s ridiculous,” he said.

Fertilizer prices jumped last fall on global demand and expectations for a large increase in corn plantings in the United States. Although those expectations have not changed, the price spike has triggered a buying boycott by farmers across the Midwest, pushing sales volumes of key products to their lowest levels since the financial crisis crushed demand in 2008.

But farmers may lose in the face-off unless they place their orders soon.

Fertilizer distributors, many of whom were burned when demand evaporated in the 2008 price crash, no longer maintain large local stockpiles. That leaves some unable to accommodate a last-minute buying spree, meaning farmers who wait to buy may have to delay plantings or grow something besides corn.

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