How Farmers Can Reduce Fertilizer Cost Risks

By Blake Jackson

According to Zachary Curtis, Extension Educator at Penn State Extension, and Becca Weir, Assistant Professor of Agricultural Economics at Penn State Extension, fuel and fertilizer costs remain two of the most important expenses affecting crop profitability.

As producers begin planning for the 2027 growing season, managing these input costs can play a critical role in protecting farm finances and reducing risk.

Fertilizer continues to be one of the largest production expenses in row-crop agriculture. Data from FINBIN show that fertilizer accounted for approximately 16% to 25% of total corn production expenses between 2006 and 2025, making it second only to land rent in many operations. With commodity margins remaining tight, careful input management has become increasingly important.

Diesel fuel prices have also risen considerably, averaging about $4.50 per gallon, more than $1.50 higher than levels seen in 2024 and 2025. While direct field fuel costs may increase only modestly on a per-acre basis, transportation and hauling expenses for both inputs and harvested commodities can significantly affect overall production costs.

Nitrogen fertilizer prices have experienced the most dramatic increases. Liquid UAN and urea prices rose sharply throughout 2025 and into 2026, creating additional pressure on farm budgets.

UAN prices climbed from roughly $330 per ton at the beginning of 2025 to nearly $600 per ton by mid-2026 before easing somewhat. Urea prices also surged during 2026, highlighting the volatility farmers face when purchasing fertilizer.

In contrast, potash prices have remained relatively stable. However, concerns about trade disruptions and Canada's role as a major supplier continue to create uncertainty about future pricing.

Curtis and Weir recommend treating fertilizer purchases as a risk-management strategy. Producers may benefit from pre-purchasing fertilizer when prices are favorable, maintaining regular soil-testing programs, accounting for nutrients supplied through manure, and carefully matching fertility programs to realistic yield goals.

They also note that proper application practices, calibration, and nutrient management can help maximize efficiency while reducing unnecessary input costs.

Photo Credit: del-voight