Fertilizer Decisions for the 2026 Crop Year

Farmers will begin to consider management decisions for the 2026 crop year as fall approaches and the 2025 growing season winds down. A near term decision will be pricing and purchasing nitrogen fertilizer for fall nitrogen applications. Today’s article provides an update on average fertilizer prices for Illinois and discusses strategies farmers can and do use to price their nitrogen fertilizer.

Nitrogen Fertilizer Prices in Illinois

Average Illinois prices for three common nitrogen fertilizer products – anhydrous ammonia (82% N), Urea (46% N) and liquid nitrogen (28% N) – are shown in Figure 1 from January 4^th 2020 through August 8^th 2025. These prices are provided in the bi-weekly Illinois Production Cost Report from USDA’s Agricultural Marketing Service (USDA-AMS).

Prices in the first week of August averaged $786/ton for anhydrous, $594/ton for urea, and $431/ton for liquid nitrogen.  These prices are 6%, 10%, and 20% higher than those reported for the first week of August in 2024.

Current prices are well below the historical highs reached in the late spring of 2022 but remain high relative to longer run averages. For example, anhydrous ammonia averaged just under $650 per ton from September of 2008 (the beginning of the available AMS data series history) through 2020.  Urea and liquid nitrogen prices averaged around $440 and $300 per ton, respectively, over that same time period.

Relative fertilizer prices provide another important perspective.  The ratio of anhydrous to monthly national cash prices for corn reported by the USDA is also included in Figure 1 (right axis). In calculating the ratio, the anhydrous price is converted to dollars per pound of nitrogen based on the average N content of 82%.  For example, the latest anhydrous price of $786 per ton is equivalent to $0.48 per pound of nitrogen ($786/(2000*0.82) = $0.48).

The relative price measure (anhydrous to corn price ratio) has followed a similar path to fertilizer price levels since the start of 2020.  Relative nitrogen prices peaked at the end of 2021 with a ratio of 0.17.  Since the fall of 2023 the ratio has varied around the current level of 0.11.  Also similar to absolute prices, the relative price of fertilizer in the past few years has been above longer run averages (average ratio of 0.09 from September 2008 through 2020).

Pricing and Purchase Strategies

Farmers utilize a range of strategies to manage price risks for inputs.  Figure 2 provides results from a fall 2024 farmdoc survey of corn farmers that was part of a research project supported by the Illinois Corn Growers’ Association.  The survey included a question focused on the strategies used by farmers when pricing nitrogen.  Strategies included forward purchases, volume discounts, bundling their fertilizer purchases with other products/services, timing adjustments (purchases and applications), and an “other” option with farmers able to select all that applied.  A total of 271 corn farmers from multiple states in the U.S. responded to this question.  Other aspects of the survey were discussed in the farmdoc daily article of October 11, 2022).

Forward purchases are very common, with 82% of respondents indicating they normally use this strategy.  Forward purchases or pre-paying can reduce price risk by locking in current price offers.  In some cases forward purchases may require the farmer to take delivery, implying the need for fertilizer storage capabilities on the farm. Many retailers also offer options to set prices for future delivery or application, typically with some portion of the total purchase amount due at the time of price determination.

Volume discounts were used by 39% of respondents.  Bundling fertilizer purchases with other products   or services and timing adjustment strategies were used by 19% and 14% of respondents. Timing adjustments include both timing of fertilizer purchases and timing of applications. In addition, many farmers indicated using multiple strategies with the combination of forward pricing and volume discounts being the most common with roughly one-third (33%) saying they use both strategies.

Varying purchases and application timing can spread price risk across multiple application windows, increasing the likelihood that purchases are made at the average price for the season.  Farmers commonly apply portions of their total nitrogen needs at multiple times including in the fall as well as either prior to, at/during, or after planting (see farmdoc daily article from July 22, 2025).

As prices can vary across retailers, farmers often collect pricing information from multiple sources (see Figure 3). Survey results indicated most farmers solicit price quotes from more than 1 retailer, with 76% saying they solicit prices from at least 2 retailers: 44% from 2 sources, 24% from 3, 8% from 4 or more.  In contrast, purchasing from a single retailer is the most common but not a majority strategy, accounting for 43% of farmers. Those purchasing from fewer sources than they solicit prices from are likely checking pricing from multiple sources to negotiate a lower purchase price.

Farmers are also advised to consider and compare crop and fertilizer prices and use available resources, such as the Maximum Return to Nitrogen (MRTN) calculator, to determine the amount of nitrogen that should be applied to maximize expected returns. The MRTN calculator would suggest total application rates of 180 lbs of N per acre in northern and central Illinois, and 200 lbs of N per acre in southern Illinois, with anhydrous prices around $800/ton and corn prices around $4 per bushel.  These prices are consistent with current price levels.

Discussion

Recent price averages for nitrogen products in Illinois have been 6% to 20% higher than the same time last year. A statistical approach to forecasting anhydrous ammonia prices based on corn and natural gas futures prices would suggest anhydrous prices are expected to remain in the $750 to $800 per ton range through this fall (see farmdoc daily from June 18, 2024). Fertilizer has historically been one of the most volatile input cost categories for farmers with recent spikes driven by supply chain concerns associated with the Russia-Ukraine conflict.  While fertilizer prices have come down from 2022 highs, they remain high relative to longer-term historical levels in terms of both absolute price levels and prices relative to corn.

Forward pricing, volume discounts, and varying the timing of purchases and applications are strategies that can be used by farmers to control costs and the risks associated with fertilizer price risk. Farmers are advised to collect pricing information from multiple sources and consider their application rates given the ongoing cost-price squeeze.

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