Fertilizer Inputs Spiral Lower

April 17, 2012 02:41 PM
Fertilizer Inputs Spiral Lower

If you still need to book fertilizer for spring or summer sidedressing, the crystal ball offers some good news. Lackluster demand, rising global production and the outlook for lower crop prices combine to push nitrogen, phosphorus and potassium prices lower.

"Buy hand-to-mouth for spring needs, and wait for prices to bottom out, likely in August, before buying 2013 supplies," advises David Asbridge, president of NPK Fertilizer Advisory Service. "Buying 2013 needs now would be a mistake."

Normally, prices peak in the spring, dip, then rise through fall. "That hasn’t happened," Asbridge says, which gives farmers an opportunity to capture significant price reductions this year.

Global Output. Global fertilizer production is on the increase. A huge new plant coming onstream in Saudi Arabia will boost global phosphate supplies by 8%. Nitrogen production in the Middle East is coming back online, and China continues to expand fertilizer output.

There are exceptions, however. "Urea prices have a little bit of life, but we don’t expect much of a jump," Asbridge says. Overall, on both nitrogen and phosphates, "there could be a bit of a bump during the spring season before prices soften."

Dave Schwartz, vice president of sales and business development for SFP, says prices stabilized in early March, in part because favorable weather allowed wheat farmers in the Plains to begin sidedressing winter wheat with urea. By mid-March, urea prices were up 10%.

It’s been a quirky year when it comes to Mother Nature, with some Iowa farmers applying nitrogen in January and February—virtually unheard of—with warm and dry conditions. However, dry conditions through much of the heartland forced many producers to hold off.

Fertilizer prices overall are under pressure. "Word on the street, however, is that there could be a spike in phosphorus prices" in April and May, Schwartz says. But beware, he adds. A spike in oil prices could push costs higher.

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Spell Check

4/18/2012 04:30 AM

  Natural gas at 10 year low - fertilizer at all time high and hasn't come down a cent around here. There's a story for you.


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