Canadian farmers heading into the 2027 growing season face a mixed fertilizer outlook, with nitrogen prices easing but phosphate markets remaining tight and geopolitical risks still capable of quickly pushing costs higher, according to Farm Credit Canada.
In a report authored by FCC senior economist Leigh Anderson, the farm lender said the return of Chinese fertilizer exports has improved global supply prospects for some nutrients. However, tensions in the Middle East and the risk of trade disruptions through the Strait of Hormuz continue to create significant upside price risk.
Urea prices in the U.S. Gulf have retreated sharply from highs reached earlier in 2026 and are now about 15% below pre-conflict levels. On the other hand, diammonium phosphate, or DAP, prices at New Orleans remain roughly 25% above pre-conflict levels, while potash prices have been comparatively stable.
FCC said Canadian fertilizer prices generally follow U.S. benchmarks, but transportation costs, exchange rates, local supply-demand conditions and retailer inventories can affect both the timing and size of price changes.
The weakness in urea partly reflects the normal summer slowdown following spring planting, along with the return of Chinese urea exports after several years of limited participation in world markets.
Still, FCC warned nitrogen prices could turn higher quickly if conflict disrupts Middle Eastern fertilizer, energy, or natural gas flows.
Phosphate markets remain more fundamentally constrained. High sulphur, ammonia, and natural gas costs have squeezed producer margins and, in some cases, curtailed production. The Middle East accounts for nearly half of global sulphur trade, leaving phosphate prices particularly exposed to further regional disruptions.
FCC said historical seasonal patterns could help farmers manage purchasing risk. Over the past five years, Canadian nitrogen prices have generally been weakest in late summer and fall before strengthening into the spring application season, with average prices peaking in April and May.
Phosphate prices have shown a similar, although less pronounced, tendency to strengthen ahead of spring seeding, while potash has displayed much less seasonality.
Anderson said many producers appear to be taking a wait-and-see approach this fall, but a phased purchasing strategy may help manage the uncertainty.
Read the full FCC report here:
https://www.fcc-fac.ca/en/knowledge/economics/seasonal-fertilizer-purchasing
