US potash (MOP) prices have risen more quickly so far in 2025 than key benchmarks in other markets. Concerns around potential import tariffs on Canada, by far the country’s biggest supplier, have acted as the major differentiator. Those concerns became a reality with President Donald Trump confirming the 25% tariffs would go into effect on 4 March. With Canada providing around 80% of US potash supply since the late 2000s, the country currently has few alternative sources to which it can turn, compounded by no significant domestic production. Despite a subsequent comment from US Agriculture Secretary Brooke Rollins on 5 March indicating a potential exemption for potash imports was being considered, MOP prices across the US look set to rise sharply over the coming months.
MOP sales to US the most lucrative for Canadian producers
Granular MOP prices in the US Midwest have seen a premium over those at CFR Brazil return since early 2022. However, import prices at NOLA have remained at near parity to those in Brazil, indicating US consumers have ultimately not been paying materially more for their MOP in recent years compared to consumers in other end markets.
That may all be about to change with sweeping 25% import tariffs on Canada placed on most products, including MOP, for now. Canada’s – and the world’s – largest MOP producer, Nutrien, indicated it would attempt to pass on the full cost of the tariffs to US farmers in its 2024 Q4 earnings call.
However, the tariffs undoubtedly pose a problem for Saskatchewan producers Nutrien, Mosaic, and, to some extent, K+S Canada. Sales to the US, which account for around a third of the companies’ combined total, are by far their most lucrative outlet. Nutrien’s reported North American sales netback is consistently higher than the netback it receives through offshore sales handled by Canpotex.
This is partly because Canada is simply geographically closer to the US Midwest than other offshore markets. Yet crucially, it is also because Nutrien and Mosaic prioritise US sales from their largest and lowest cost mines, Rocanville and Esterhazy respectively, in the south of Saskatchewan. Both companies have invested heavily during the 21st century turning these mines into low-cost behemoths to maximise revenues from the higher US netbacks. Since Q1 2023, Nutrien’s North American sales have generated around $100 /t more than those directed offshore.
Each company will undoubtedly try to preserve their US revenues by passing on the tariffs to US consumers through higher prices. Given both Nutrien and Mosaic handle their own US sales and operate their own distribution networks throughout the US Midwest, they are in a strong position to attempt do so. However, such activity could attract heightened competition from offshore suppliers to the US. Canada may be by far the largest supplier to the US, but it is not alone.
Offshore MOP supply to US currently limited but could grow amid higher US prices
The remaining 15-25% of annual US potash supply comes from a combination of a small amount of domestic production in New Mexico and Utah by Intrepid Potash and – most importantly – from overseas producers such as Russia, Israel, and, until 2022, Belarus. The vast majority of the volumes arrive via the port of NOLA and are barged up the Mississippi.
While not insignificant sources of MOP supply, combined offshore imports into the US have rarely surpassed 2 Mt/y and often sit much closer to 1.0-1.5 Mt/y – limited in comparison to the more than 7 Mt/y typically delivered from Canada. The extent of the difference is highlighted in the chart below derived from CRU’s Potassium Chloride Market Outlook (see more on CRU Fertilizer Services here).
In further contrast to their Canadian counterparts, offshore suppliers like Russia and Israel have little incentive to preferentially supply the US market given the general pricing parity in recent years between major granular MOP importing markets. Yet, Nutrien and Mosaic passing on the import tariffs to US consumers could change that calculus as higher US prices relative to those in other markets will likely attract more volumes from offshore suppliers.
That said, it seems unlikely US potash supply sources will radically shift in the near term. Offshore suppliers do not possess the level of inland distribution infrastructure operated by Nutrien and Mosaic. Moreover, port space limitations at NOLA could prove a further bottleneck, although the extent of this is less clear. Nevertheless, higher prices in the US would attract more tonnes from the likes of Russia and Israel – and perhaps even Belarus if the US lifts sanctions on Belaruskali/BPC (assuming no further import tariffs are applied to any of the aforementioned countries).
Consequently, Nutrien and Mosaic may find themselves undercut on price meaning they could struggle to pass on the full cost of the import tariffs to consumers for very long. This in turn might begin to erode their large North American sales netback premium, reducing their incentive to supply the US.
US MOP prices to jump higher in the short term despite uncertainties on tariffs impact
Whether US import tariffs on Canada will remain at the initial 25% level and how long they will endure – both specifically to MOP and more generally – are total unknowns. Indeed, comments from US Agriculture Secretary Brooke Rollins just the day after tariffs were imposed indicated the administration was considering “exemptions and carve outs…for potash” but they were still “to be determined”, adding yet further uncertainty.
Similarly, the extent of the reactionary shifts in US potash supply origins remains unclear. Much will depend on how much of the tariff costs Canadian suppliers are ultimately able to pass on to US consumers and, in turn, how much additional offshore supply can physically arrive in the US through the port of NOLA.
Any major changes to US potash supply, however, will almost certainly not prove quick. Consequently, the US will remain reliant on Canada for the vast majority of its MOP requirements over the short term, even if overall US potash consumption is impacted. If Nutrien CEO Ken Seitz’s comments from the company’s 2024 Q4 earnings call come to fruition, “the tariff cost and tariff impact will be passed on to the US Farmer”.
As such, CRU forecasts granular MOP prices in the US Midwest to rise much more quickly than those in other markets. By August, we expect the US FOB Midwest benchmark to be $65/t (metric) higher than it was at the end of February – nearly double the increase we project in the competing granular market, Brazil.
If you would like to know more about the potential impacts of US import tariffs on the potash sector or the wider fertilizer industry, CRU’s Fertilizer Analysis provides in-depth insights. Additionally, CRU will be hosting its 2025 Phosphates and Potash Expoconference in Orlando, Florida from 31 March to 2 April where import tariffs are bound to dominate discussions across the event.
