OMAHA (DTN) -- With emerging supply both in the global market and in North America, the nitrogen outlook for 2026 could be positive. Supply disruptions led to higher fertilizer prices in 2025. More supply would mean that prices could fall to historically normal costs, according to fertilizer analysts.

The last few years have proven that many different factors can cloud the nitrogen outlook. A lack of new supply coming onto the market, geopolitical disputes and uncooperative weather can all alter the outlook of nutrients' supply, demand and prices.

IFA: FERTILIZER USE RECOVERING

Global fertilizer use recovered in 2024, reaching a new record, according to the International Fertilizer Association's (IFA) Public Summary Medium-Term Outlook 2025-2029 report (https://www.fertilizer.org/…). The report was released in 2025 and covers "fertilizer years," which run from January of one year to January of the next year for some countries but run from midyear to midyear for other countries.

Fertilizer use (nitrogen, phosphorus, potash) increased 4.5% to 198 million metric tons (mmt) of nutrients in 2023 and is projected to rise another 4.4%, to reach 206 mmt in 2024. This marks a 17-mmt increase from the low of 189 mmt in 2022 and 4 mmt above the previous record demand of 202 mmt set in 2020.

Increases in global fertilizer usage are expected between 2025 and 2029, though at a slower pace than in the past two years, according to IFA. With an annual growth rate projected between 1% and 2%, total use is forecast to be 224 mmt by 2029, an increase of 18 mmt compared to 2024.

These increases came on the heels of significant contractions in global fertilizer usage in 2021 and 2022 because of high prices. The recovery in nutrient use was largely driven by a sharp decline in prices from their peaks in mid-2022.

SUPPLY CONTINUES TO BE POSITIVE

The supply forecast for nitrogen fertilizers continues to be positive, according to IFA.

Global ammonia output is estimated to have reached 190.5 mmt in 2024, which represents a 3% increase over 2023. Urea production also rose considerably, reaching 201 mmt in 2024, also up 3% year-over-year.

According to IFA, nitrogen capacity investment is centered in countries with low-cost gas resources and in decarbonization hubs, led by the United States, Nigeria, Qatar, United Arab Emirates (UAE) and Russia. Global ammonia capacity is projected to grow by 10.5%, from 195 mmt N in 2024 to 216 mmt N by 2029.

Global ammonia capacity is projected to increase from 166.6 mmt in 2024 to 184.9 mmt by 2029, representing a 9% increase during the period. This capacity growth will be driven by the startup of new plants spread across the world, with all regions forecast to increase capacity.

"With total ammonia capability expected to grow slightly faster than demand over the next five years, the nitrogen balance is forecast to lessen from a theoretically available supply of 3.4 mmt in 2025 to 7.0 mmt in 2029," the IFA report states.

N FERTILIZER SUPPLY ISSUES LINGER

Samuel Taylor, Rabobank Research analyst, Farm Inputs, told DTN that among the reasons nitrogen fertilizer prices continued to be less affordable in 2025 was the delay of new nitrogen fertilizer supply. This was especially true in the U.S., he said.

Gulf Coast Ammonia, located in Texas City, Texas, was a new facility that opened in the beginning of 2025. The plant, which was supposed to supply the market with an additional 1.3 mmt of ammonia annually, faced several production disruptions and did not produce any product for most of the year.

Any additional nitrogen fertilizer supply would help the North American market at this point, Taylor said.

Production began again in the fall at this facility, but there has been some talk of more production snafus recently. Mark Milam, senior editor, Fertilizers, ICIS, said the plant might have had more production issues in recent weeks, and it could be down once again.

"We had heard their goal was 80% of capacity and to have 100,000 tons of production by the end of the year, but they seem to have had some more issues," Milam said.

Another ammonia plant near Beaumont, Texas, is set to open in the first or second quarter of 2026. This new facility, Woodside Energy's Beaumont New Ammonia, would help to create some additional supply to the global market, he said. This plant, when operational, will produce 1.1 mmt of ammonia, according to the company's website (https://www.woodside.com/…).

GLOBAL NATURAL GAS SUPPLY ISSUES

Another issue affecting the nitrogen fertilizer supply in 2025 was the various hiccups in the worldwide supply of natural gas. Natural gas is a basic ingredient in producing nitrogen fertilizers.

Natural gas supply constraints caused some nitrogen fertilizer supply issues in 2025. This occurred across the world, including Trinidad and Tobago, Mexico, Egypt, Bangladesh, Algeria and Iran, according to IFA.

Taylor said the natural gas supply into major nitrogen producer Trinidad and Tobago improved as 2025 progressed. However, a possible nearby geopolitical issue might affect their natural gas supply in 2026.

The continuing U.S.-Venezuela dispute could affect the flow of natural gas into Trinidad and Tobago, which would affect the amount of nitrogen fertilizer out of the Caribbean nation. An expansion of the conflict could cause supply issues for the major nitrogen fertilizer producer, he said.

"We could still see some volatility with ammonia," Taylor said.

SEVERAL FACTORS AFFECT 2026 OUTLOOK

The outlook for nitrogen prices in the new year will depend on several different factors, according to fertilizer analysts. These include the many geopolitical concerns around the world, supply disruptions, spring weather and how many corn acres U.S. farmers plant. Issues in any of these factors could alter the outlook in 2026.

Justin Rackleff, the principal analyst leading North American fertilizer analysis for London-based CRU, said the fall fertilizer application season could influence where fertilizer prices will go into 2026. There were reports that some regions saw a normal fall application season, but other areas of the Corn Belt might have seen a shortened season because of the beginning of winter weather.

How much nitrogen will have to be applied in the spring will affect the market. More spring applications usually mean higher prices for other forms of nitrogen fertilizer, such as UAN and urea, Rackleff said.

"The number of corn acres we plant will have some effect on fertilizer prices as well," Rackleff said. "I've seen 92 million acres as the number, but what happens if it is more or less? This would affect the demand of fertilizer."

Urea could see some upside risk in 2026, he said. Export demand is increasing from countries such as India, which could see urea imports increase from 9.1 mmt last year to 9.6 mmt in 2026.

India pushing for more urea might mean higher prices on the world market, he said.

Rackleff said UAN could also see some upside risk in the new year. More UAN tons heading into Europe could have an effect on this form of nitrogen's prices, he said. More UAN could be used in the U.S. if limited nitrogen applications were made this fall.

The remaining form, ammonia, might have a better chance of seeing lower prices in 2026. He believes more supply from various suppliers across the world will help to keep ammonia prices lower, Rackleff said.

Josh Linville, StoneX vice-president of fertilizer, told DTN that assuming there are no issues facing the global fertilizer market, nitrogen prices could slip back into "a more normal range in 2026."

He believes a better supply globally into the nitrogen market would help to push prices lower. Whether that happens or not will be the next thing, he said.

While it appears that there could be a peace deal coming in the Russia-Ukraine war, Linville said any escalation in the war in the Black Sea would have a negative effect on fertilizer in 2026. Russia is a huge exporter of nitrogen fertilizers, as well as potash.

"If (Russian President Vladimir) Putin would escalate the war in 2026, that would completely change the nitrogen outlook into the new year," Linville said.

Linville said another factor that could affect fertilizer in 2026 would be the $12 billion agriculture aid President Donald Trump recently announced. (See https://www.dtnpf.com/….) While it might not solve all of farmers' profitability issues, this additional money might allow crop producers to apply more fertilizer.

The unknown details of this aid are obviously important. Whether the aid is a check or in the form of a loan -- and when farmers would see the money -- might influence their fertilizer plans for the 2026 growing season, he said.

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Editor's Note: This is the first of three stories in DTN's special Global Fertilizer Outlook series. To see DTN's weekly column on Retail Fertilizer Trends, check out https://www.dtnpf.com/….

Russ Quinn can be reached at Russ.Quinn@dtn.com

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