Current Marketing Thoughts
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Fertilizer Prices to Push Higher
Jan 03, 2011
There is no debating the fact that fall weather was quite accommodating to getting fertilizer spread for the 2011 crop. For those who's cropping plans have changed and you need to buy fertilizer in the spring, the financial pain could certainly shock you. With many in the industry projecting double-digit percentage increases next year in the variable cost of producing corn, wheat and soybeans, fertilizer cost have to be one of the main driving forces behind the escalating cost. I doubt I am telling any of you something that you don't already know, but from the data I have seen, central corn belt fertilizer prices for ammonia (a leading source of nitrogen), have risen by almost 50% in just the past six months. During this same period, market prices for phosphate have risen close to 40%, and potash has climbed by more than 10%. Of the three, I am hearing that potash could be the most volatile, with prices in the Midwest around $520 a ton and more than likely rising to prices in excess of $740 a ton by the spring. Just like everything else in the Ag industry, fertilizer is more and more a world market. I hope you followed my lead months ago, when I told you that China, one of the leading producers and users of fertilizer was kicking around the idea of imposing 110% export tariffs on urea and phosphate fertilizers, and that it would drive our domestic prices here at home higher...Well guess what? It has happened, and it only looks like it will continue to get worse in the coming months. If you look inside the numbers you will see that farmers here in the US spent around $44 billion raising their crops in 2010, and more than 40% has gone to fertilizer. Right now the USDA estimates average per-acre fertilizer expenses for 2010 at $124.26 for corn, $57.32 for wheat and $22.46 for soybeans. As we move towards spring these numbers are certain to rise. Make sure you have yourself covered. I know several followed my initial lead last time, because several of them have sent me personal "Thank-You" cards on how much I helped them save. Don't miss it this time around...fertilizer prices are going higher!
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