Breaking Down the January 2026 NDSU Agricultural Trade Monitor: IEEPA Fertilizer Tariffs, Price Pass-Through, and Market Adjustment

The January 2026 edition of the NDSU Agricultural Trade Monitor examines how tariffs imposed under the International Emergency Economic Powers Act (IEEPA) affected agricultural input markets during 2025, with a particular focus on fertilizers. While fertilizer tariffs generated relatively modest fiscal revenue, their interaction with supply chains, trade adjustment, and market uncertainty produced disproportionately large effects on prices and farm-level input costs.

IEEPA Tariff Revenue Collected on Selected Agricultural Inputs

Between February and October 2025, IEEPA tariffs generated an estimated $958 million in revenue from agricultural input imports. Farm machinery accounted for the largest share of collections, followed by agricultural chemicals, fertilizers, and seeds. Fertilizer-related tariffs totaled approximately $110 million over this period.

Relative to overall production costs, this revenue is small. U.S. agricultural producers spent more than $33 billion on fertilizers in 2025, implying that less than 1 percent of annual fertilizer expenditures were collected as tariff revenue. However, this comparison understates the true economic burden of tariffs. Tariff revenue measures only what is transferred to the government, not the broader price and quantity adjustments that occur when supply chains respond to policy shocks.

Fertilizer Trade Adjustment Following IEEPA Tariff Implementation

Fertilizer markets responded rapidly to the announcement and implementation of IEEPA tariffs in April 2025. Importers front-loaded shipments ahead of tariff enforcement and shifted sourcing toward tariff-exempt suppliers where possible. Despite these adjustments, overall import volumes declined materially.

Exhibit 1 shows cumulative U.S. seaborne fertilizer imports in 2025 relative to the three-year average, distinguishing between IEEPA-exposed and non-IEEPA imports. Imports of DAP were initially elevated ahead of tariff implementation but ultimately fell roughly 41 percent below historical averages. MAP imports exhibited a similar contraction, reflecting both tariff exposure and elevated global prices. Urea imports followed a different pattern, as increased shipments from non-IEEPA suppliers partially offset declines from tariff-exposed sources. Potash imports remained relatively stable due to widespread exemptions.

These quantity responses indicate that tariff exposure altered not only sourcing decisions but also reduced effective supply in the U.S. fertilizer market. Even where trade diversion occurred, it was insufficient to fully offset the contraction in tariff-exposed imports, tightening market conditions during the 2025 growing season.

Exhibit 1. Cumulative U.S. Seaborne Imports of Fertilizer by IEEPA Status, 2025 vs. 3-Year Average

Note: Lines show U.S. seaborne imports excluding Canada and Mexico. “3‐year avg” represents the average for 2022–2024. Since potash is primarily sourced from Canada, U.S. import data for potash are sourced from the S&P Global Trade Atlas and include all modes of transportation through October 2025.

Source: NDSU using data from the S&P Global Trade Atlas and PIERS.

Fertilizer Price Impact, Recovery, and Tariff Pass-Through

The tightening of fertilizer supply is reflected most clearly in prices. Because Canadian fertilizer prices were not subject to IEEPA tariffs, U.S.–Canada price differentials provide a clean benchmark for isolating tariff effects.

Exhibit 2 shows fertilizer prices in the U.S. Northern Plains relative to Canadian benchmarks. Following tariff implementation, U.S. fertilizer prices rose sharply. For DAP, the U.S.–Canada price differential peaked at more than $170 per metric ton above pre-tariff levels, with MAP and urea exhibiting similar, though smaller, divergences. These price gaps indicate that tariffs were rapidly transmitted into U.S. prices rather than absorbed by foreign exporters.

Exhibit 2. U.S. Northern Plains Versus Canadian Fertilizer Prices

Source: NDSU using data from Bloomberg.

Exhibit 3 places these price movements in context by comparing year-over-year changes in U.S.–Canada price differentials with the effective IEEPA tariff rate. During peak tariff months, fertilizer price increases exceeded the tariff itself. For DAP, spot-market pass-through rates exceeded 300 percent, while retail pass-through rates surpassed 150 percent.

These more-than-complete pass-through rates suggest that tariffs interacted with uncertainty, precautionary inventory behavior, and supply chain frictions to amplify price effects. Rather than acting as a simple wedge between foreign and domestic prices, the tariffs contributed to market disruption that magnified their impact on downstream buyers.

Exhibit 3. U.S. Spot–Canada Price Differentials: Year-Over-Year Monthly Changes

Note: The red dotted line indicates the effective IEEPA tariff rate. Yellow bars indicate the tariff period (Apr–Nov 2025).

Source: NDSU using data from Bloomberg.

November Fertilizer Tariff Rollback and Price Adjustment

In mid-November 2025, fertilizer tariffs were rolled back, providing an opportunity to observe how quickly markets adjust when policy uncertainty is reduced. Wholesale markets responded rapidly: spot prices for DAP, MAP, and urea declined sharply, reversing most tariff-driven increases within weeks. By early January 2026, MAP prices had fully returned to pre-tariff parity, while DAP prices had retraced most of their earlier increase.

Retail markets adjusted more slowly. As of early January 2026, retail fertilizer prices remained above pre-tariff baseline levels, indicating persistent price stickiness at the farm level. This divergence highlights how policy-induced price shocks can dissipate unevenly across the supply chain, with farmers experiencing delayed relief even after tariffs are removed.

Limited Disruptions from Low Mississippi River Levels

Despite Mississippi River water levels approaching historic lows in late 2025, falling within roughly five feet of the 40-year minimum, transportation markets remained relatively stable. Unlike the severe disruptions observed in 2022, barge rates did not spike dramatically, and grain movements along the river system continued largely uninterrupted. Down-bound barge rates in December 2025 were elevated but remained well below the extreme levels recorded during the 2022 low-water crisis.

Several factors helped mitigate transportation stress. Improved river management practices and early dredging efforts by the U.S. Army Corps of Engineers helped preserve navigability despite low water levels. In addition, lower soybean export volumes reduced pressure on barge demand, offsetting stronger corn shipments and preventing congestion. As a result, inland–Gulf basis spreads for corn and soybeans showed little evidence of severe market stress, limiting the extent to which transportation constraints compounded fertilizer and input cost pressures faced by producers.

China Reaching Soybean Purchase Commitments

China’s soybean purchases remained closely aligned with policy commitments despite U.S. soybeans trading at a substantial price premium relative to Brazilian supplies. As of early January 2026, cumulative U.S. soybean sales to China totaled roughly 8–9 million metric tons. When sales reported as “unknown destinations” are included,many of which are widely interpreted as China-bound, total sales reached approximately 13 million metric tons, exceeding the 12 MMT purchase target.

Notably, these purchases occurred during periods when U.S. landed prices were significantly higher than those of competing Brazilian soybeans. This pattern suggests that recent Chinese buying behavior was driven less by short-term price competitiveness and more by strategic or policy considerations, consistent with earlier episodes of commitment-driven procurement. The persistence of purchases despite unfavorable price differentials underscores the role of policy objectives in shaping trade flows during the 2025 marketing year.

Read the full December 2025 NDSU Agricultural Trade Monitor: https://doi.org/10.22004/ag.econ.387621 

For inquiries, contact:

Shawn Arita – shawn.arita@ndsu.edu

Matthew Gammans – matthew.gammans@ndsu.edu

Jiyeon Kim – jiyeon.kim@ndsu.edu

Wuit Yi Lwin – wuit.yi.lwin@ndsu.edu

Sandro Steinbach – sandro.steinbach@ndsu.edu

Ming Wang – ming.wang@ndsu.edu

Xiting Zhuang – xiting.zhuang@ndsu.edu