Higher Fertilizer Prices Pressure US Farmers | Presented by CME Group

Cost Analysis - Fertilizer costs represent a significant portion, ranging from 20% to 30%, of the total expenses for producing crops like corn and soybeans [1] - Farmers are increasingly using the bushel-to-ton ratio to assess fertilizer costs relative to potential revenue, rather than solely focusing on the dollar price per ton [3] - For example, with corn 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] - Similarly, with soybeans at roughly $10.70 per bushel, it would take about 36 bushels of soybeans to purchase one ton of URA [5] Risk Management & Market Dynamics - Fertilizer needs and prices are influenced year-round by factors such as weather, crop quality, market dynamics, and river levels [2] - Late-season weather events or forecasts for lower-quality harvests can prompt farmers to consider additional fertilizer applications [3] Hedging Opportunities - CME Group's introduction of a smaller 10-ton URA US Gulf futures contract provides farmers with a new opportunity to hedge fertilizer costs [6]