High prices for fuel, feed and fertilizer challenged producers in 2022, and they’re not likely to come down anytime soon.

“Fertilizer prices obviously have gone up and have gone up tremendously,” said Gary Schnitkey, extension farm management specialist with the University of Illinois.

Fertilizer prices really started increasing in the fall of 2021, and there are a lot of factors contributing to that, he said during the latest “DairyLivestream” webinar.

One of the big factors right now and one that’s likely to keep those prices from retreating is the Russia-Ukraine conflict, he said.

“Russia happens to be a major producer of nitrogen as well as natural gas,” he said.

Natural gas is used to produce ammonia, an important base for nitrogen fertilizers.

Russia’s natural gas goes to Europe, which faces much higher natural gas prices, he said.

“So their nitrogen fertilizer sector is really, really facing difficulty … potash and phosphate as well,” he said.

A lot of those inputs are moving out of Russia, but there are still sanctions on Russia. In addition, the Russia-Ukraine conflict has made supply chains much more difficult to manage, he said.

“As a result, we see these … high fertilizer prices stubbornly high. And I really do not see those coming down into the spring,” he said.

The fertilizer price forecast is based on the Russia-Ukraine war not being settled but not getting worse. Fertilizer prices could go up if there’s any sort of supply chain issues associated with natural gas or anything else, he said.

“So we’re still living in this very volatile time,” he said.

The one thing that could cause them to come down is the price of corn and soybeans because they’re highly correlated with fertilizer prices. But prices for corn and soybeans — important feedstuffs — aren’t expected to decline in the near term, he said.

So moving into the spring there’s probably no relief, and fertilizer prices will be stuck at stubbornly high levels, he said.

The longer term outlook for corn and soybean prices is for some downward pressure. Cash prices for corn right now are in the $6.80-a-bushel range. Those prices are projected to decline to $5.60 to $5.80 next fall. Soybeans would have a similar pattern, he said.

Those projections are based on normal soybean yields. But if Brazil and Argentina plant more soybean acres and have normal yield or above and the U.S. doesn’t have a drought, soybean prices could go much lower by next fall, he said.

Soybean prices are currently about $14.50 a bushel.

But unless the U.S. has tremendous corn and soybean yields or there’s some sort of good yield some place, there probably won’t be much of a decrease in prices, he said.

“So it’s weather, and that will be determining those corn and soybean prices,” he said.

Fuel prices, particularly for diesel, are also high. That’s a refining issue and a demand issue, he said.

“There might be more backing off of fuel (prices), but I wouldn’t bet on it either,” he said.