As the beginning of September draws near, US phosphate market participants are divided over how much demand at the farmgate will be lost this fall because of unfavorable affordability and limited supply options.
The US phosphate market is undersupplied, so the biggest killer of demand will be lack of supply, several buyers agreed. The domestic phosphate market overall anticipates an unavoidable decline in application demand this fall compared to last fall, stemming from import tariffs and lower production.
Lower crop values are further applying downward pressure on demand. A farmer would have to sell 206 bushels of corn to afford a short ton of Nola DAP last week, compared with an average of 133 bushels of corn in September 2024, according to an Argus analysis. A short ton of Nola MAP is equivalent to 208 bushels being sold by a farmer, compared to an average of 149 bushels of corn in September 2024.
But phosphate traders seem to be in two camps when it comes to discussing fall demand. The first camp insists demand destruction is being exaggerated because of the significant nutrient removal that occurs with spring planting and fall harvest. Soil will need to be replenished with nutrients, which should limit fall demand destruction to just roughly 20pc lower than last fall, those distributors said.
"I think we are overplaying this demand destruction thing," one source said. "There are a lot of tons that need to be bought still."
The second camp, however, anticipates a 30-40pc reduction in demand for this fall compared with the last because of the unfavorable affordability for growers.
Running out of time
The timeline for any unexpected spot demand to pop up is just around the corner as applications typically begin at the start of September. Distributors this week have reported customers that initially refused to buy tons over the summer are now returning to the spot market, discovering prices have increased further and supply options continue to be limited.
Both domestic production and imports of phosphate within the 2024-25 fertilizer year came up short compared to the year before. Domestic output has faced shortfalls within the last 12 months after hurricanes in the summer of 2024 battered production facilities.
Combined domestic DAP and MAP output for July 2024 through June 2025 was down by 10pc from the previous fertilizer year, according to data from The Fertilizer Institute. Combined DAP and MAP production for the period totaled 2.69mn short tons, 5pc lower than the five-year-average.
And DAP and MAP imports into the US for this past fertilizer year totaled roughly 1.98mn metric tonnes (t), down by 24pc from the prior year, according to US Census Bureau data, driven lower by the imposition of tariffs, which has deterred offshore suppliers.
About 968,000t of DAP was brought into the US during the period, down by 36pc from the prior year and 10pc lower than the five-year average. US MAP imports fell to roughly 1mn t in the year through June, down by 9pc from both the prior year and the five-year-average.
The latest round of US tariff rates began on 7 August, and though Russian nitrogen and all potash imports are without duties, the domestic phosphate market is left with a sliver of the supply options it had just last year. Market participants, in turn, will be forced to either apply what is possible this fall given the current unfavorable supply and demand scenario, or hold onto optimism that the factors at hand will become more favorable by the spring.
