P&K Today: After 175Lbs N, What's Left for P&K?

January 9, 2014 05:56 AM
 

Retail phosphate prices fell strongly on the week with MAP leading declines... Potash slips an even dollar.

 

Fertilizer prices continue to fall. The rumors of declines that kept buyers out of the market in fall 2013 now becomes a demand concern for retailers and fertilizer manufacturers. Early survey numbers from one of our sources found that, of the farmers surveyed, average expenditures on P&K for the upcoming crop will be roughly half that of the prior year.

This sentiment is not at all uncommon and as cash corn falls to $4.20 1/2 this week, the declining economics of growing corn make it hard to be optimistic... but let's run the numbers and see just what $4.20 corn gets us. At trendline 160 bu/acre, $4.20 corn adds up to $672.00/acre in new-crop revenue. We have noted 18% of expected new-crop revenue as a good place to start when budgeting fertilizer.

At $672.00/acre, 18% equals $120.96/acre for fertilizer. We figure 175lbs N right off the top. What remains goes toward P&K. The survey mentioned above had it that growers expected to pay roughly $40.00 per acre on P&K for the '14 crop. To get that done, the table below suggests a 50-50 split application of NH3 and UAN28% puts us in that ballpark.

N Source
N Cost per acre @ 175lbsN/acre
P&K budget per acre
Anhydrous
$68.68
$52.28
Urea
$88.37
$32.59
UAN23%
$93.62
$27.34
UAN28%
$97.12
$23.84
Urea/32%
$90.99
$29.97
NH3/28%
$82.90
$38.06
28%/32%
$95.37
$25.59

Based on prices reported to your Inputs Monitor for the week ended Jan. 3, 2014. Check with your preferred retailer -- prices vary.

This week --

  • DAP $142.99 below year-ago pricing -- down $6.76 on the week to $503.42/st.
  • MAP $126.66 below year-ago -- down $9.54 this week to $530.88/st.
  • Potash $115.73 below-year ago -- down $1.00 this week to $473.43/st.
  • December 2014 corn futures opened 4 cents lower this morning than our last P&K Today at $4.45 with the national average cash corn price 2 1/2 cents lower from last week at $4.20 1/2. National average corn basis firmed 2 1/2 cents on the week to stand 3 1/2 cents above March 2014 futures.

 

By the Pound --

DAP is 3/4 cents lower at 52 3/4 cents/lbP2O5; MAP is 2 3/4 cents lower by the pound at 50 cents/lbP2O5; Potash unchanged on the week at 39 1/2 cents/lbK2O.

The following is an updated table of P&K pricing by the pound as reported to your Inputs Monitor for the week ended Jan. 3, 2014.

P&K pricing by pound -- 1/9/2014

DAP $P/lb

MAP $P/lb
Potash $K/lb
Iowa
$0.55
$0.53
$0.40
Illinois
$0.51
$0.48
$0.39
Indiana
$0.50
$0.48
$0.38
Wisconsin
$0.47
$0.54
$0.38
Minnesota
$0.51
$0.50
$0.39
South Dakota
$0.55
$0.50
$0.40
North Dakota
$0.56
$0.48
$0.41
Nebraska
$0.52
$0.49
$0.43
Missouri
$0.53
$0.49
$0.38
Kansas
$0.55
$0.49
$0.42
Ohio
$0.55
$0.50
$0.38
Michigan
$0.53
$0.51
$0.37
Average
$0.52 3/4
$0.50
$0.39 1/2
Year-ago
$0.68
$0.61
$0.48

 

The Percentages Year-over --

The figures below give us insight into where prices were last year at this time compared to today's price by percentage. The year-on-year potash margin narrowed 1.7% on the week to stand 17.9% below year-ago; DAP widened 0.8% to 22.1% below year-ago; MAP widened the gap 1.3% to 19.2% below last year's price, and NH3 widened the year-over gap by 0.5% during the week to end at 26.2% below last year's price at this time.

 
Current regional average price/short ton
Percent of year-ago
Potash
$473.43
-17.9%
DAP
$503.42
-22.1%
MAP
$530.88
-19.2%
NH3
$650.52
-26.2%

 

 

 

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