Fertilizer markets are set to remain firmly supported for the next several years, with no meaningful price relief on the horizon, says Keith Busch, CEO of ClearCost. Structural supply deficits, trade disruptions, and rising logistics costs continue to lock in a higher global price floor—and Canadian growers are feeling the effects.
Busch says both nitrogen and phosphorus remain in a significant global shortfall, estimated at “about 2 million to 3 million metric tonnes… the demand is greater than the supply.” New capacity is coming, but timelines are long: nitrogen may not return to balance for roughly 24 months, and phosphorus could take three to four years. Because Canada relies heavily on imported phosphorus and participates in nitrogen trade, domestic prices remain tied to those global constraints.
Geopolitical and trade complications add another layer of cost. Product from Russia, Ukraine, and Iran is still reaching the world market, but often “through a convoluted supply chain that's adding on margin,” Busch says. That shift has effectively eliminated the low-cost supply that once tempered prices. Combined with fuel surcharges and long-haul freight across Canada, regional variability remains entrenched.
Recent price lows—urea near $720 and MAP around $1,200—still sit well above historical norms, pushing growers to explore efficiency tools and alternative products.
Given the outlook, Busch says on-farm storage can be a strategic advantage when brief price dips occur within an otherwise strong market. With fertilizer expected to remain a high-cost input for the foreseeable future, he says that ClearCost’s trading, logistics, and regulated payment platform is designed to give buyers more visibility and control in a complex global market.
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The Canadian Agri Food Policy Institute is driving bold policy solutions for resilient Canadian agri food system and building a stronger future for Canadian agriculture. Visit capi-icpa.com to discover how. I'm Amber Bell and this is real agriculture here today at the Western Canadian Crop Production Show. Getting a chance to chat with Keith Bush, who's the CEO of clearcost. Now we're going to be talking fertiliser market, so welcome, Keith. It's great to see you.
Thank you, Amber, Appreciate it.
So what is going on in the fertiliser markets currently?
It's a great question. I think the best way to start thinking about fertiliser is look at the macroeconomic supply and demand balance, because that'll affect everything at the local level as well. So both nitrogen and phosphorus are in a macro deficit of about 2 million to 3 million metric tonnes globally. Or what that means is that there is new production coming online, but it's going to be years out because these capital projects take years to get to market. So with nitrogen, we're looking at about another 24 months before the supply and demand balance comes back to equilibrium. And with phosphorus, it's going to be somewhere between three or four years. So with that in mind, the demand is greater than the supply, which means the price is going to be higher at the macro level. Now, that will affect the Canadian market because we do import most or all of our phosphorus from overseas and down south. Nitrogen we produce, but we also export. So both of these commodities are going to be subject to the global trade that we're talking, imbalances that we're talking about here. And I think that's where people need to gear their expectations for the rest of the decade. We're not really going to see a significant softening, I believe. And again, I don't want to extend an opinion too far into the future, but just based on those macroeconomics, it's unlikely that they're going to soften significantly between now and 2028 to 2030.
With all the discussions on tariffs and trade negotiations, how is that impacting the markets currently?
That's a great question. So nitrogen is probably the most affected because it comes out of Russia, the Ukraine and Iran. And those three countries generally produce. I don't know the exact global percentage, but it's a meaningful supply to the, to the globe. So with Iran, what you're waiting for essentially would be a successful revolution and then a resumption of normal trade activity. That product still makes it to market. It's just when it's sanctioned, what happens is the individual owners of the factories are sanctioned and the product's got to change hands three or four times and go through different countries before it makes it to market. So it still gets here, it's just being marked up through that process. So the low cost supply that normally we were used to maybe five years ago, it's, it's in the market at a higher cost now. Russian and Ukrainian product, same thing. It is getting to market, it's just getting to market again through a convoluted supply chain that's adding on margin. So the low cost supplies are not there and you have an imbalance. And those two forces are what's causing, I think global prices to stay relatively high.
And how much do freight charges impact the fertiliser prices that the farmer sees at the gate?
Yeah, that's a great question. So in Canada in particular, we've got 74 million landlocked acres. Our supply for nitrogen comes out of four factories that everyone's aware of. And your distance from those factories is going to be factored in every single sale. And so the further you are away, the higher the cost will be. And if the product's coming in like phosphorus and it's imported, it's your distance from transload facilities. And in both those cases, moving thousands of metric tonnes of cargo burns fuel. There's fuel surcharges on top of that regular cargo rate. And all of this compounds to create the variance that you see from RM to RM around the prairies. A place like the Peace, for example, is going to be a little bit higher than somewhere just outside Medicine Hat or Belle Plaine.
And how are current prices relevant to historical norms?
Oh, I mean, I think everyone will tell you they're higher.
Right.
There's. Yeah, it's this combination of macro deficit of supply, higher labour replacement and operating costs throughout the entire supply chain. Everything has seemed to compounded to create this new baseline price. And we're seeing around, you know, we look at the last 12 months, I think the low that we saw for nitrogen on granular urea would have been around 720, which historically is still quite high. And map has been sitting at 1200 for better part of a year. So it's probably a good idea to look at the efficient use of those nutrients in your farm. I'm not an agronomist, so I don't want to speculate on what that would be, but I know that we've got products listed in our portfolio on clear Cost that the manufacturers describe as more efficient use of the nutrient within there. So you're able to actually get better yield out of your crops with less application rate. So you'd have to talk with them and get more agronomic advice. That's not my strength. But as far as the markets go, yeah, I think the timing to explore alternatives is probably around now.
Efficiency and of course exploring alternatives is a great idea. What else would you say to growers based on the markets and their conditions right now? Would you say this is a time to just use what's available and hold off on storage? You know, what would you be looking to for the future?
I think I. That's a great question. I think storage is an advantage and the reason I say that is if we can, if we take this macroeconomic view, that the markets are going to be, you know, continuously high for the next couple of years. At those moments where you do see some discount, Even if it's 5 or 10% in that market, that's a significant discount. And so often the thought is on a 12 month cycle, the product's going to reset in June, July. Well, we didn't see that this year and I'm not going to speculate about 20, 26. So we didn't see it in 25. I won't speculate about 26, but I think storage is an advantage here. And when those moments come when you can get a bulk to discount or you can get a lower point, price point in the market based on the last 12 or 24 months, which is information we provide, it might be wise to get some product and hold it. I know you're locking in costs for future years doing that, but at the same time it's going to be tricky over the next couple of years to get discounts on particularly N and P products.
Great. And before we end off here, why don't you just briefly touch on clear cost and what it is?
Yeah, Clear cost is trading and risk management software for fertiliser and we've got three products that roll out into a single application. There's a trading software where you can contract for physical delivery. We've got a logistics software on the back end that tracks all of those orders, whether they're coming from a local distribution point or one further away. And then we've got a financial technology and we're the only licenced money service business in agriculture in Canada and we operate an escrow trust account for the payments that trade through our system. So you can use clear cost to find pricing both locally, nationally, internationally, and then contract and track that order right down to your vineyard. So if you've got storage and you've got capital and you're looking to maybe take advantage of a broader market of supply and some more options, that's what we provide.
Wonderful. Well, I want to thank you so much for your time. And that was Keith Bush on real agriculture.
Thanks, Amber.
