The global financial crisis and ensuing recession created one of the most challenging environments the crop inputs industry has seen in decades, says Erin FitzPatrick, assistant vice president of Rabobank's research group. "Much of the pain has worked through the system for key input sectors, such as crop protection and fertilizers. Stocks have been depleted and prices have stabilized—at lower levels.”
The value of fertilizer purchases fell strongly in 2009 as farmers sought to reduce costs. "Lower application rates in 2009 suggest farmers will buy more fertilizer in 2010,” FitzPatrick says. "Seed expenditures actually rose close to 15%, while crop protection was up slightly.”
A look at the number of bushels of corn it takes to buy a metric ton of fertilizer reveals that urea and diammonium phosphate (DAP) have returned to below levels of 2004–2006. "Potash price has not returned to levels in January 2008, before the price runup began. It still takes 150 bu. of corn to buy a metric ton of potash—near the peak level,” FitzPatrick says.