One Step To Soften Fertilizer Prices
On Monday, European natural gas prices were half of what they were at the most recent market high. While this is a positive development to encourage more fertilizer production to come back online, Josh Linville of StoneX explains it’s just one of many necessary steps forward to reduce fertilizer market prices.
“It's it's a good step for 2022 to start with,” he says. “But it's just it's a solid first step is all it is.”
You can listen to the full interview from AgriTalk here:
“We didn't get here overnight, and you're not going to solve it overnight,” he says.
His latest interview on AgriTalk was before natural gas prices on Tuesday spiked up after news of Russia changing its supply to western Europe.
Linville notes the political dynamics are one of the things to watch, because even if lower prices are realized again, they have to be sustained for the production side to catch up and provide a best case scenario.
“This year, not only do we have that normal demand, we actually have more because we have to make up for the difference in strong European demand,” he says.
Linville wants to share a positive message for the 2022 growing season, and he believes the U.S. will have adequate supplies of fertilizer—even if they do carry higher prices the U.S. will be able to get volumes needed. And as for prices, he says it’s a coin flip if fertilizer prices go higher or lower for spring.
He says much of it weighs on the emotional side of the fertilizer trade. And he notes currently New Orleans urea and phosphate shipments are cheaper than examples from other global trading ports relative to what’s being paid elsewhere.
“I don't see us having a situation where we cannot find the product now. Do we have to pay a higher price to find the product if we wait too long? Absolutely. But I think that we've got enough to go around. And that's just because ultimately we have a free market,” he says.
