OMAHA (DTN) -- The phosphorus fertilizer outlook in 2026 looks to be extremely complex. Affordability remains historically bad in 2025, and this situation looks like it could remain in place into the new year.

As is the case for both nitrogen and phosphorus, the outlook for 2026 is somewhat cloudy. Countervailing duties in the United States, less Chinese exports and demand destruction across the world are major issues facing the nutrient.

However, there are some bright spots for phosphorus fertilizers, according to fertilizer analysts. Lower prices at the end of 2025 and less demand destruction than originally assumed are a couple positives as we head into 2026.

IFA: GLOBAL 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%, and 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 is expected to be seen between 2025 and 2029, though at a slower pace than 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.

P SUPPLY FORECAST TO BE OPTIMISTIC

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

Global phosphoric acid production is estimated to have increased by 5% in 2024, reaching a record 89.6 mmt, IFA reported. MAP and DAP production also climbed by 5% year-on-year to 67.2 mmt; this would be the second-highest annual volume since 2020.

"China and Morocco were the primary contributors to this growth, with increases of 11% and 4% respectively," the report said.

IFA reports that capacity in phosphorus fertilizer is expected to increase 14% between 2024 and 2029, reaching 71.7 mmt by the end of the forecast. Africa, West Asia and East Asia are expected to drive this growth. Most new capacity is being developed by existing producers in Morocco and Saudi Arabia.

Smaller expansions are also anticipated in Jordan, Egypt and Tunisia.

IFA estimates phosphoric acid capacity is forecasted to grow from 54.9 mmt in 2024 to 61.4 mmt in 2029, a 12% increase. As capacity is expected to outpace demand, the phosphate balance is projected to loosen from a surplus of 4.4 mmt in 2024 to 5.9 mmt in 2027.

"Although fertilizer phosphate demand growth is slowing, it is largely offset by a surge in global purified phosphoric acid (PPA) demand," the IFA report said. "This demand growth is forecasted to drive a stabilizing phosphate balance by the end of the medium term, assuming PPA demand growth of 5% per year."

P AFFORDABILITY REMAINS EXTREMELY LOW

Despite many positives in the global production outlook, the affordability of phosphorus fertilizer remains historically unfavorable globally.

Samuel Taylor, Rabobank research analyst, Farm Inputs, told DTN affordability for phosphorus fertilizer is at an all-time low level. In his research, he went back and found the nutrient is at its least affordable level since the large fertilizer price increase of 2008.

And it is bad both in the United States and internationally. Many believed it would be worse for a country like Brazil, considering how much the country imports, but affordability is worse in the U.S., Taylor said.

This has led to demand destruction for the nutrient. Internationally, farmers around the world have decided to cut back on phosphorus applications.

Josh Linville, StoneX vice-president of fertilizer, said he thinks U.S. farmers have tried to cut corners with phosphorus application. There were some estimates we could see up to 50% reduction in phosphorus applications, but it is probably below that level, he said.

Farmers generally have cut back on applications in recent years because of high prices. Many have picked fields with higher levels of phosphorus fertilizer in order to apply less of the nutrient, he said.

"But obviously you can only do this for so long before it begins to affect yields," Linville said.

Justin Rackleff, the principal analyst leading North American fertilizer analysis for London-based CRU, said he believes the cutbacks on application might be occurring in different regions. While the heart of the Corn Belt might be seeing close to regular phosphorus applications, other areas which would be considered the fringe acres, such as the Dakotas, might see larger cutbacks, he said.

He added that he believes the drop in phosphorus fertilizer demand is probably in the 10% to 15% range.

Mark Milam, senior editor, Fertilizers, ICIS, said one positive he saw recently was phosphorus fertilizer prices were slightly lower at the end of 2025. Lower fertilizer prices and higher commodity prices made the affordability issue not as bad as it was earlier in mid-2025, he said.

"Hopefully these lower phosphorus prices stick around in 2026," Milam said.

LESS CHINESE P EXPORTS, COUNTERVAILING DUTIES CONTINUE TO LOOM LARGE

Internationally, a supply issue which continues to linger is China's pullback on phosphorus fertilizer exports. Once a major player in the phosphorus fertilizer export business, the nation has dramatically limited its exports.

Rackleff said in 2015 China exported about 11 mmt of phosphorus fertilizer. Ten years later in 2025, the country is expected to only export 4.5 mmt.

"From 2021 to 2022, China had a 42% drop in phosphorus fertilizer exports," Rackleff noted.

CRU forecasts China will export 5.6 mmt of phosphorus fertilizer in 2026, a slight increase from the previous year.

As has been the case in recent years, China has decided to focus on its domestic phosphorus fertilizer market to assure Chinese farmers have access to the nutrient at the expense of the country's export business.

Taylor said this could be a structural change to the market and China may never return to the higher levels it exported in the past. Chinese phosphorus fertilizer exports have been halved since 2021, he added.

This situation affects the global market and means less reliable exporters on the market, Taylor said.

Linville said other phosphorus fertilizer producers have stepped up to produce more product for the global market, including major producers Morocco and Saudi Arabia and other less-known producing countries.

"Saudi Arabia has increased production by 3 mmt, while Morocco is around 2.7 mmt to help fill this lost production," Linville said.

A major issue facing phosphorous affordability in the U.S. is the ever-continuing countervailing duties battle.

For five years now, duties are being applied to phosphorus fertilizer imports from both Morocco and Russia, thus raising the cost of imports. Countervailing duties is a policy instrument that attempts to remedy market distortions generated by foreign subsidies by imposing tariffs on imported products (https://www.aaea.org/…).

Taylor said a recent study had been done examining the effects of the countervailing duties on phosphorus fertilizer prices in the U.S. According to this study, U.S. farmers are paying 34% more than the rest of the world's farmers for the nutrient.

The results of the study were a little surprising to Taylor. He said he knew prices were higher in the U.S. but would have thought it would have been closer to 15% to 20%.

2026 P PRICES COULD REMAIN STEADY

With these global issues in place and most likely not going away in 2026, the price outlook for phosphorus fertilizer appears to be generally in the same range it currently is in, according to fertilizer analysts.

Taylor believes prices in the New Year could be very similar to where they were in 2025. Retail phosphorus fertilizer prices will probably continue to be in the $800- to $900-per-ton range for DAP and MAP.

"Affordability will remain very unfavorable, still," Taylor said.

Milam said the phosphorus fertilizer outlook is still strong despite higher prices. The global market appears to be well-balanced and prices could stay steady, he said.

"Prices could be steady with a normal (weather) spring," Milam said.

Linville said he could see a situation in which phosphorus prices might decline some in 2026, but this would not be a very steep fall in prices.

We hope that prices are lower in 2026 compared to 2025 but there are lot of factors that need to be met, he said.

Rackleff said he is more optimistic about prices than he was a year ago at this time. There are some positives with the global phosphorus fertilizer market, he said.

This includes fertilizers did not see any reciprocal tariffs in 2025, there is expected to be more DAP exports coming from Saudia Arabia in the first quarter of 2026, and better fertilizer demand expected in 2026.

"While there is some key upside risk in 2026, I believe the recently announced agricultural aid of $12 billion by the Trump administration is going to help fertilizer demand somewhat," Rackleff said.

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Editor's Note: This is the second of three stories in DTN's special Global Fertilizer Outlook series.

See: Global Fertilizer Outlook - 1, "2026 Nitrogen Prices Will Be Determined by Several Global Factors, Including N Supply," https://www.dtnpf.com/…

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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