How Volatile Fertilizer Business Affects You

February 4, 2009 06:00 PM
 

Sara Muri, Top Producer Business & Crops Online Editor
 
Fertilizer demand across the globe continues to escalate, said Ford West, president of The Fertilizer Institute, and increasing demand is causing major changes in the industry. West spoke during the Top Producer Seminar last month in Chicago, Ill.
 
West predicts three major industry trends:
 
  • Buying in portions: "Retailers are going to layer their buying,” he said. "They cannot afford the risk of going to July and trying to purchase all their material they think they're going to need for the spring. The risk is too great.”
 
  • Evolving relationships: West said the relationship will change between dealers and farmers. "They [dealers] are going to ask you, if they haven't already, to sign a contract,” he said. By doing this, dealers can confidently purchase fertilizer, knowing they will have guaranteed buyers.
 
  • Consolidation City: "There will be further consolidation in my industry,” West said. Since there is increased risk in all aspects of the fertilizer world, he said, some retailers will be pushed out of business.  
 
 
West said the top consumers of fertilizer are:
  1. China
  2. India
  3. the U.S.
 
India just passed the U.S. in fertilizer consumption, he said, and this shift is causing some changes.
 
 
 

 
You can e-mail Sara Muri at smuri@farmjournal.com.

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