Monthly Report – Global Agriculture
A Weaker Agriculture Economy In 2024 Favors Keeping Ammonia Market Growth In Check
Key Findings
- General Thoughts: Our first global agriculture monthly report targets crop market and input trends in 2023 and their likely development in 2024, with a significant focus on ammonia fertilizer given its 2H23 margin strength.
- Supply Chain/Commodities: Global ammonia market demand over-enthusiasm risks jolting supply in a market where economics do not support it. Economic uncertainties and several challenges may lessen the risk in 2024.
- Energy/Upstream: North American ammonia producers hold a sizable cost advantage relative to Europe and Asia. However, recent Ex-US natural gas price weakness has curbed this advantage, favoring more global supply.
- Sustainability/Energy Transition: We highlight our global hydrogen cost work, the challenges of cutting CO2 from fertilizer, and the complex traceability challenges of mapping low-carbon farm output to downstream consumers.
- Downstream/Other Chemicals: We discuss recent weakness in crop prices that also reflect an elevated soybean-to-corn price ratio and global food inflation trends yet to subside for consumers in a few significant markets.
Exhibit 1: In 2023, US Fertilizer equities outperformed the S&P Fertilizer & Agricultural Chemical Index, which was also beaten by the broader market (Ex. 2). Falling crop prices and Ex-US energy costs are an early year headwind in 2024.
Source: Bloomberg, C-MACC Analysis, January 2024
See PDF below for all charts, tables and diagrams
Client Login
Learn About Our Subscriptions and Request a Trial
Contact us at cmaccinsights@c-macc.com to gain full access and experience our services!
