Lower Fertilizer Prices Provide Opportunity for Brazilian Farmers

Recent declines in commodity prices have tightened margins for Brazilian soybean producers, but the good news is that fertilizer prices have declined even more in recent months than soybeans. This has provided Brazilian farmers the opportunity to lock in cheaper fertilizer prices for their 2023/24 soybean production.

According to the vice president of Mosaic Fertilizers, the price of fertilizers in Brazil have declined 70% compared to a year earlier. This will provide Brazilian farmers the best opportunity in 22 months to barter some of their anticipated soybean production in exchange for needed inputs.

During the 2022/23 growing season, Brazilian farmers reduced their fertilizer applications by 10% to save costs. They decided to rely on some of the existing soil fertility instead of expensive fertilizers. With the recent decline in fertilizer prices, it is expected that Brazilian farmers will increase their fertilizer applications 5-10% for their 2023/24 soybeans.

Fertilizer purchases in Brazil are currently 10% to 15% behind the average pace for the last five years and companies are warning farmers in Brazil to not delay their fertilizer purchases due to potential logistical bottlenecks. As planting approaches, a rush to deliver fertilizers could delay their delivery and drive-up freight prices enough to eliminate any savings from lower fertilizer prices.

Tags: commodity prices, fertilizer, Brazil, prices, soybean, Production, purchases