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Why Fertilizer Prices Are Squeezing Tennessee Farmer Margins — And What To Do About It
Fertilizer prices have become one of the biggest threats to farm profitability
Peak price of anhydrous ammonia in 2022, up from under $500/ton in 2020 — a 3x increase in under two years.
Fertilizer now accounts for up to 45% of corn and wheat operating expenses, according to USDA ERS data.
Urea prices also surged past $1,000/ton in 2022, putting enormous pressure on row crop profitability.
Synthetic nitrogen fertilizers are made from natural gas. When energy prices spike — as they did dramatically after 2021 — fertilizer prices follow. Farmers have no control over this cost driver.
Geopolitical events and supply chain disruptions have repeatedly cut off fertilizer supply, creating shortages that drive prices higher and make planning nearly impossible.
Beyond fertilizer, farmers face rising costs for fuel, labor, equipment, and crop protection chemicals — all compounding the pressure on margins.
While prices have moderated from peak levels, they remain significantly above pre-2021 norms and are expected to stay elevated. Farmers who rely solely on synthetic inputs remain exposed to this volatility.
Soybean, corn, and cotton farmers have seen fertilizer costs eat directly into per-acre profit. In some cases, input costs have risen faster than commodity prices, turning historically profitable operations negative.
High-value crop producers face the same input cost pressures, but with the added complexity of consumer demand for organic and sustainably-grown produce — making chemical dependency increasingly costly both financially and reputationally.
Livestock and hay operations, already operating on thin margins, have been hit hard by rising costs for nitrogen to maintain forage quality and yield.
Reduce your dependence on expensive synthetic inputs
Terreplenish®'s nitrogen-fixing bacteria naturally produce nitrogen from the atmosphere, reducing your need for purchased synthetic nitrogen.
Phosphate-solubilizing bacteria make nutrients already in your soil available to plants, reducing phosphorus fertilizer needs.
Terreplenish® pricing is stable and not tied to natural gas markets. Reduce your exposure to fertilizer price volatility.
The statistics on this page are drawn from official USDA Economic Research Service data on fertilizer use and pricing.
View USDA ERS Fertilizer Report ↗Join Tennessee farmers reducing fertilizer dependency with Terreplenish®. Start with our risk-free pilot program.