US Farm Input Costs Split as Urea Jumps 9.1% While Diesel Tax Relief Lands for Harvest
US distributor urea prices jumped 9.1% to 796.25 dollars a short ton in the week ending 2 October while UAN28 fell 11.1%, even as Washington deferred the federal diesel tax on dyed fuel to ease harvest-time fuel bills that still sit near record levels.
US fertiliser markets are no longer moving as a single complex. USDA Agricultural Marketing Service distributor asking prices for the week ending 2 October show urea at 796.25 dollars per short ton, up 66.25 dollars or 9.1% on the week, and potash at 571.35 dollars, up 6.8%. UAN28 moved the other way, dropping 11.1% to 533.34 dollars, while DAP eased 1.7% to 945.56 dollars, MAP fell 3.8% to 978 dollars and ammonium sulphate slipped 1.2% to 573.50 dollars, with anhydrous ammonia quoted at 945 dollars and UAN32 at 645 dollars.
The split matters because the two nitrogen forms price off different drivers. Urea is a globally traded dry product with heavy exposure to seaborne supply and export policy, whereas UAN is a liquid whose economics track regional production, storage and transport. Urea had already corrected sharply from its spring 2026 highs once Hormuz shipping conditions improved and Chinese exports returned, so the renewed rise suggests the summer correction did not remove the market's sensitivity to supply conditions. Phosphates remain comparatively soft.
Fuel is the other half of the fall cost picture. President Trump signed an executive order late on Monday temporarily opening highway use of tax-free red-dyed diesel and deferring the federal diesel tax through the end of the year, with no interest and no penalties. The federal diesel tax is 24.4 cents a gallon, worth about 60 dollars on a 250-gallon fill and more than 100 dollars where states match it, and USDA put the total relief at roughly 640 million dollars. Red-dyed diesel is widely used in agriculture and construction.
Even with the tax deferral, pump prices remain near historic highs. AAA put the national average diesel price at 6.3207 dollars a gallon on 5 October, only slightly below the record 6.53 dollars set in late September, after war-related refinery outages in the Middle East and Ukrainian drone damage to Russian refineries tightened supply. On the nitrogen side, a separate DTN retailer survey for late September found all eight major US fertilisers above year-ago levels, led by anhydrous ammonia at about 977 dollars a ton, up 25% year on year, with urea at 675 dollars a ton, up 9%.