Crop Inputs

Crop input updates

Producer sentiment rises amid better commodity prices, but concerns linger.

Energy prices rise temporarily on Russian sanctions.

West Texas Intermediate (WTI) oil prices rallied in the first half of January due to sanctions placed on Russian oil exports. The impact was limited as there is a growing consensus that global oil markets are oversupplied due to lower demand. The ceasefire between Israel and Hamas represents a significant conflict de-escalation and increases stability within the Middle East, a major supplier of oil. Greater stability will help to ensure against supply shocks. Natural gas prices rallied on cold weather from mid-December to mid-January. President Trump is pushing to lower energy costs on multiple fronts:

• Domestic: President Trump is seeking to deregulate the oil and gas sector to promote new capacity. Many analysts think this initiative will have little to no impact on supply as current prices are at/near break-even levels for new well construction. Natural gas producers are still reeling from a wave of bankruptcies during the shale boom and are reluctant to invest in new capacity.
• International: President Trump is encouraging Organization of Petroleum Exporting Countries (OPEC) to increase oil output; however, Saudi Arabia, the largest producer in OPEC, appears unwilling to do so due to its own national interests.

Trucking demand falls.

Trucking demand ended 2024 on a down note due to lower industrial output and shipping volume following “frontloaded” activity to avoid tariffs. Shipments are falling more than expenditures, resulting in a slight increase in rates. Following two years of capacity reductions, many analysts expect rates to increase moderately in 2025. Much will depend on trade policy and economic growth, two interrelated factors that influence trucking demand. See our Spotlight for an update on shipping conditions.

Nitrogen fertilizers start to rise.

Nitrogen fertilizer prices were mixed in January, with notable gains in anhydrous ammonia and little change to urea. Domestic prices for both could increase due to elevated natural gas prices and tightening global supply conditions. Global drivers include supply disruptions from Iran, restocking ahead of the upcoming agriculture season and increased demand from India. Prices for potassium fertilizers remain stable, but this could change if tariffs are applied to Canada as it is the primary supplier of potash to the U.S. Analysts expect relatively low corn prices in 2025 and this may incentivize lower phosphate and potassium application rates. Lower application rates may put downward pressure on fertilizer prices.