Nitrogen prices continued lower this week along with the rest of the fertilizer segment. This is a supply driven decline as much as it is a correction to better reflect wholesale prices. UAN32 is priced just 1/4 of a cent above expected margins with NH3. That is the closest we have seen UAN or urea come to parity with NH3.
Wholesale values have been far below retail prices and as retailers have resupplied at the onset of harvest, retail prices have fallen to a more appropriate relationship to wholesale prices. How long the downtrend will last is unknown, but as long as we are pointed lower, we will hold off on booking anymore fertilizer for fall or for spring.
The Wisconsin Department of Agriculture, Trade and Consumer Protection and Department of Justice announced this week that they have reached a settlement with Lakes Gas Companies regarding complaints related to propane prices during the historic runup in winter 2013-14. During the week of February 21, 2014, Wisconsin LP prices surged to as high as $5.10 per gallon according to Inputs Monitor data.
Diesel prices continue to drift lower even as WTI crude oil firms. That is due to soft global demand for all fuels, and building U.S. distillate stocks. So far, LP doesn’t appear to be in any kind of hurry to firm.
The big news this week is MosaicCo’s potash production cuts alongside already stifled phosphate production. Like much of the ag industry, Mosaic has examined its prospects for the upcoming year and noted that U.S. P&K demand is likely to remain lackluster in the upcoming fall and spring application seasons.
Fertilizer prices have fallen over the past year, but when compared to expected new-crop corn revenue, we see there is work still to be done in righting the imbalance between production returns and fertilizer prices.
