WHOLESALE US prices for fertilizer are dropping, and that could signal easing food-cost pressures and relief for farmers getting set for spring planting.

Cornbelt urea prices fell 8.2% on Friday to $675 per short ton, the lowest since October, according to Bloomberg’s Green Markets. Prices have fallen each week this month as the market adjusts to recent reports of full warehouses, signaling the anticipated shortage of the crop nutrient this year may not come to pass. 

Retail prices are still at stratospheric levels, but that could soon reverse, Green Markets analyst Alexis Maxwell said in an e-mail.

“US retail urea prices are firm as wholesalers have higher-cost inventory in their system,” Maxwell said. “As they replace inventory with lower-cost urea, I expect them to pass on the savings to farmers ahead of spring plantings and in the first quarter.”

Fertilizer prices soared to repeated records over the last few months, spurred by setbacks including an energy crunch in Europe, unexpected plant closures and halted exports from major suppliers. The increase has stoked concerns over prospects for further food inflation at a time when consumers are already paying more for staples like grains and coffee.

Still, urea “remains a significant on-farm expense” despite the drop in January, according to Maxwell, who said prices are still almost double the level they were at this time last year. — Bloomberg