Higher Fertilizer Prices Pressure US Farmers | Presented by CME Group

Cost Analysis & Risk Management - Fertilizer costs represent a significant portion, 20% to 30%, of total crop production expenses for crops like corn and soybeans, posing a year-round financial risk for farmers [1] - Weather conditions, crop quality, market trends, and river levels can impact fertilizer needs and prices throughout the year, necessitating a proactive approach to fertilizer management [2] - Farmers are increasingly using the bushel-to-ton ratio to assess fertilizer costs relative to potential revenue from crops like corn and soybeans [3] Market Dynamics & Pricing - As of December 26, with corn priced at approximately $4.60 per bushel and URA at $400 per ton, a farmer would need to sell about 84 bushels of corn to purchase one ton of URA [4] - With November soybeans at roughly $10.70 per bushel, approximately 36 bushels of soybeans are needed to purchase one ton of URA [5] Hedging Opportunities - CME Group's introduction of a smaller 10-ton URA US Gulf futures contract provides farmers with a new avenue to hedge fertilizer costs [6]