Agriculture Market Update: Q1 2025 in Review
Potash and phosphate prices rose through the first quarter of 2025 on the back of supply and demand fundamentals and US tariff threats

Potash and phosphate fertilizer prices, which hit their lowest annual averages since the pandemic in 2024, have begun to climb again in the first quarter of 2025.
The average phosphate price rose to US$572.1 during the fourth quarter of 2024. This upward trend has continued, with prices increasing to US$582.70 in January, US$603.80 in February, and US$615.10 in March.
Similarly, the price of potash also increased during the final quarter of 2024, reaching an average of US$238.90, with this momentum carrying over into 2025. The price rose to US$302 in January, US$318.80 in February, and US$336.30 in March.
The rising prices were attributed to several factors, including hurricanes Milton and Helene, the threat of tariffs from the US government against its key trading partners, and other geopolitical tensions.
Trends impacting phosphate markets
The key trend driving phosphate prices higher in recent years has been reduced export volumes from China.
In 2021, China began to limit the export of phosphate fertilizers, prioritizing domestic demand. These restrictions caused China’s total exports to decline from 9 million metric tons in 2021 to 6.6 million metric tons in 2024.
Supply was further affected by a more significant halt on exports from China that began in December 2024. This halt resulted from the rising cost of sulphur, necessary for separating phosphate from rock. At the time the export stoppages were enacted, the expectation was that they would be lifted starting in April 2025.
In an email to the Investing News Network (INN), Josh Linville, vice president of fertilizer at StoneX, indicated that Chinese exports had dropped to 98,300 metric tons in January and February. If this trend persists, it would translate to 589,800 metric tons, placing exports for 2025 well below the 6.6 million metric tons recorded last year.
He also mentioned that demand, particularly from India- the leading buyer of phosphates- has been robust as the country seeks to rebuild its low fertilizer stockpiles. This has driven up values there by US$40 per metric ton since the start of the year. Similarly, prices in Brazil and the US, the second and third largest buyers respectively, have increased by US$50 per metric ton.
Linville remained uncertain whether prices would retreat in the near future.
“The combination has caused global values to jump and if it continues, makes us question summer price resets,” he said.
While the US generally produces a substantial share of its phosphate fertilizer, output was disrupted in the second half of 2024 due to hurricanes Helene and Milton which impacted key production areas in Florida and North Carolina.
This has driven up the demand for imports and coincided with US President Donald Trump’s trade wars. Although the US doesn’t usually source its phosphate imports from China, meaning the 154 percent tariffs won’t affect US farmers, imports from countries like Morocco and Peru will still encounter a 10 percent increase in fees. This would leave only Saudi Arabia as the remaining tariff-free supplier.
Linville is also unsure of how tariffs might impact the US market.
“In theory, if US phosphate production is normal, there should be enough supply to meet North American demand, but that has not been the case as production rates have struggled in recent years due to various issues,” he said.
Linville suggests that if US production remains low and tariffs are imposed against Saudi Arabia, farmers in the US and Canada would see increased costs. However, if US production returns to normal, tariffs would have minimal impact.
Potash trends
While potash prices have also risen since Q4 of 2024, the market's challenges differ from those facing phosphates.
Regarding supply and demand, potash is generally robust. However, Linville notes that a significantly longer fall season has severely depleted stockpiles. Furthermore, the extended season has overlapped with the typical winter fill period when producers start adding fresh tonnage to their inventories.
“We have seen Midwest averages start the year near US$300 and currently sit near US$360, that is a US$60 or 20 percent increase,” Linville said.
However, it’s not just fundamentals affecting the agricultural sector, particularly in the US. Some of the price increases may be linked to Trump’s tariff threats, but it is difficult to quantify their effect.
“It has been hard to discern between tariff effect and natural fundamental price movements as the market entered (the) spring season,” Linville stated.
Currently, rising prices are raising concerns, particularly among grain producers, whose profitability has been challenging over the past few years.
“Farmer economics/profitability for 2025 was already in a bad place, with farmers’ biggest hope to merely make payments. Having inputs starting to rally price ideas in the face of disappointing grain values, only adds fuel to the fire,” Linville stated.
The US relies heavily on potash imports, with Canada supplying about 85 percent of its needs. Any increase in potash prices could significantly affect American farmers and the nation’s food production.
So far, Canadian potash has largely avoided US tariff measures, facing only a 10 percent increase on products that are not USMCA compliant. This includes potash blended with other potash or sourced entirely from outside North America.
If more significant tariffs are imposed, farmers may have already weathered the worst of it. Linville explained that not having the tariffs in place earlier this year gave farmers more time to prepare.
“While any tariffs are detrimental, having the delays from February was hugely helpful as US farmers were backed into a corner with little to no time to try and pivot to other global manufacturers. Today, if tariffs go into place it is likely that flows continue from Canada, but it will give buyers time to research alternative origins,” he said.
Linville noted that if the US can pivot to the rest of the world, it might drive Canadian potash prices down to remain competitive, thereby alleviating some of the tariff burden on US consumers. If the US cannot find new sources of potash, this would likely mean the full weight of tariffs is passed down from Canadian producers to US farmers.
Looking ahead
When it comes to the fundamentals, Linville doesn’t see much changing.
Phosphate prices are likely to hinge on how China structures its export rules over the next few months and how much Indian demand is placed on the market. If nothing changes, prices will remain extremely elevated.
Meanwhile, potash production remains robust, with more production expected over the next 18 months, including BHP’s (NYSE:BHP,ASX:BHP) Jansen project in Saskatchewan, Canada. Linville noted that prices could rise if there are widespread curtailments.
Regarding tariffs, uncertainty remains high, and it’s an issue investors should monitor closely. A change in tariffs could have significant implications for fertilizer prices and the wider agricultural community.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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