The Inputs Monitor covers a wide swath of states and the timing of spring fertilizer applications is different for each of the 12 states we cover. This week’s price survey presents something of a turning point. Soil temperatures and precipitation play a role in determining when the application window opens, and since spring fieldwork progress begins in southern areas and works it’s way north seasonally, price action in states including Kansas, Missouri and Nebraska can yield clues to price action in states farther north.
The map at right indicates the net weekly price changes in each of the 12 states in our survey. The changes include price fluctuations in NH3, DAP/MAP, potash, UAN and urea by the short ton. Overall, our Nutrient Composite Index continued higher this week but prices in the southwest corner of the 12-state region faltered with Missouri posting a net price decline of $19.71.
Missouri is often a bellwether for future price moves, and also indicates demand-based price fluctuations. In other words, if farmers have largely moved from buying fertilizer to applying it in Missouri, price declines there may indicate price direction across the Midwest once growers in other states hit the fields.
The soil temperature map pictured here shows that the time is right in Kansas, Nebraska and Missouri to apply anhydrous and other preplant fertilizers. Ohio is unchanged this week overall as most of that state’s soil has warmed to workable levels. Illinois is up only mildly and we might expect lower prices in that state as early as next week if fieldwork hums along. Indiana is a bit of an anomaly as it posted the strongest net gain this week, even though soil temperatures throughout the state are ripe for fertilizer applications. That may signal that farmers are still in the buying phase of spring applications or that more Indiana growers favored a hand-to-mouth approach than in other states.
This week’s declines in Kansas, Nebraska and Missouri and unchanged price action in Ohio may also indicate a greater than expected shift away from corn and wheat acreage in favor of soybean plantings. We will have more on this as time passes and acreage mixes finally flesh themselves out later in the spring. The price increases we note in Indiana this week, which buck the trend set by Ohio and Illinois, were largely influenced by sharp gains in anhydrous and urea in the Hoosier state. That may indicate Indiana growers intend to lean much more heavily on corn plantings than in other states. Here again, we will revisit this possibility once acreage mixes are made known.
Longer-term, we may be able to extrapolate reasonable price targets for fall booking by noting how far prices fall after spring applications. Had Missouri, Kansas and Nebraska all firmed this week, we would expect fall prices to be above today’s across more of the 12-state region. Since prices fell this week in those key areas, we can expect prices to fall in kind in other areas once demand from buyers is exhausted. That assumes no major supply shortages, which could cause prices to firm unexpectedly in affected areas..
Individual net price movements from state-to-state lend clues to the longer-term outlook this time of the year, and so far, it appears the trend will be for lower fertilizer prices, once demand-based strength is exhausted.
