Rising global nitrogen fertilizer prices will weigh on farmer behavior across the EU, but Expana expects the impact to be much more pronounced in the next wheat crop cycle than in the current one.
At this stage, there are no immediate nitrogen shortages in the EU. Farmers have already secured most of their requirements earlier in the campaign, partly in line with seasonal buying patterns and partly to avoid higher costs linked to recent EU trade policy changes.
However, higher prices are narrowing options for the next crop cycle. The immediate risk is that some EU farmers may slightly reduce their application rates for the 2026 crop, as they look to manage exposure to higher-priced inputs ahead of the 2027 harvest.
Wheat crop quality in focus for 2026/27 marketing year
The main impact of reduced application rates for the 2026/27 crop is likely to be on quality rather than yields. Nitrogen remains a key driver of protein content, particularly for durum and milling wheat. Lower applications could weigh on wheat protein levels, even if crop yields hold.
From a market perspective, this would tighten the availability of higher-quality milling wheat within the EU. It could also widen spreads between milling and feed wheat, particularly if quality premiums strengthen.
For now, Expana is keeping its 2026 grains production outlook largely unchanged as weather is expected to play a much larger role in determining yields at this stage of the crop cycle.
2027/28 marketing year outlook: acreage and yield risks build
But looking further ahead, the outlook becomes even less supportive for EU grains production. If nitrogen prices remain elevated into the next buying cycle, Expana expects pressure on farm margins to increase.
Those higher input costs would likely deter planting in more marginal EU crop areas, which would reduce overall acreage for the 2027 crop. At the same time, more uneven fertilizer application could start to affect EU crop yields more directly.
While Expana will not start publishing its 2027 production estimates until September 2026, significant losses to EU grain yields and acreage can be expected if fertilizer prices hold firm.
Global context and longer-term risks
Globally, production risks for the 2026/27 marketing year are more acute in parts of the Southern Hemisphere, where sowing for the next crop begins in H2 2026 and farmers have had less time to secure inputs.
Over the longer term, attention is likely to extend beyond nitrogen. Phosphate markets present a more structural risk, with supply of key feedstocks such as sulfur and sulfuric acid concentrated in geopolitically sensitive regions, including those linked to flows through the Strait of Hormuz.
Crops can tolerate lower phosphate application for a limited period, but any prolonged constraint would become a more significant headwind to crop production.
For now, however, nitrogen remains the main factor shaping farmer decisions and near-term crop outcomes across the EU and elsewhere.
Image source: Adobe
Written by Andrew Kanyemba
