Rising fertilizer prices threaten corn production profitability in the US

US farmers are facing a significant increase in production costs due to higher energy and fertilizer prices, putting additional pressure on corn production profitability. According to USDA forecasts, US agricultural producers’ spending on fertilizers, lime and soil conditioners is expected to rise by 15.3% in 2026 compared with last year, an increase of $5.3 bln. The main driver is the high cost of energy, on which fertilizer production heavily depends.

Natural gas prices are having a particularly strong impact, as gas is used not only as an energy source but also as a key feedstock in nitrogen fertilizer production. Meanwhile, phosphate fertilizer production depends on sulfur supplies obtained from crude oil refining and natural gas processing. Persistently high energy prices could keep fertilizer costs elevated and increase the financial burden on farmers.

Corn producers are particularly vulnerable to rising costs because the crop requires substantial nitrogen fertilizer inputs. According to Dow Jones Energy, fertilizers traditionally account for approximately 17–24% of total corn production costs in the US. Further increases in fertilizer prices could significantly reduce farm profitability, especially if grain prices fail to rise at a comparable pace.

Higher diesel prices and transportation costs are adding further pressure on the agricultural sector. US producers rely heavily on road, rail, river and ocean transportation to move grain, feed and other agricultural products. Rising logistics costs increase delivery expenses and could weaken the competitiveness of US grain in international markets.

If energy and fertilizer prices remain high, US farmers may reconsider their planting decisions for 2027, potentially shifting toward crops with lower nitrogen fertilizer requirements. Under these conditions, soybeans could become a more economically attractive alternative to corn. At the same time, prolonged increases in production and transportation costs could gradually affect wholesale and retail food prices, as farmers, processors and other supply chain participants have limited capacity to absorb additional expenses.

Tags: fertilizers, corn, USA