Tag Archives: Fertilizer

 Fertilizer prices continue to move higher, with nitrogen fertilizers once again leading the way, according to retailers tracked by DTN for the last week of December 2018.

At $568/ton, the average retail price of anhydrous is 9% higher than last month and 21% more expensive than at the same time last year. (DTN Chart)

For the third week in a row, three fertilizers’ prices are significantly higher. Overall, seven of the eight fertilizers tracked by DTN saw price increases from last month.

Anhydrous prices are 9% higher compared to last month with an average price of $568/ton. That’s an increase of $49/ton.

UAN28 prices are up 8%, an increase of $20/ton. The nitrogen fertilizer has an average price of $266/ton.

UAN32 is $16/ton more expensive than last month, a 6% increase, with an average price of $303/ton.

Four other fertilizers’ prices were slightly higher. DAP had an average price of $507/ton, up $6/ton; MAP $533/ton, up $3/ton; potash $379/ton, up $10/ton; and 10-34-0 $457/ton, up fractionally from last month.

One fertilizer was slightly lower in price compared to last month. Urea’s average price dropped $2/ton to $407/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.44/lb.N, anhydrous $0.35/lb.N, UAN28 $0.47/lb.N and UAN32 $0.47/lb.N.

Higher fertilizer prices have made for a less-than-positive end to the year for farmers in the market for nutrients. It’s even affected some farmers who tried to avoid higher fertilizer prices by locking in prices months ago.

Quentin Bowen, a corn and soybean farmer from Humboldt, Nebraska, told DTN he booked about two thirds of his anhydrous needs last August for fall application. Harvest dragged on until Christmas in southeastern Nebraska and very little anhydrous was applied this fall.

He said the contract included a clause that gave his retailer the choice of whether to honor the contracts into the spring. The company could add a monthly storage charge for product that wasn’t applied in the fall or it could choose to cancel the contact completely.

Bowen said he and other growers were told the second week of December that the anhydrous contact was being cancelled.

“We could get our money refunded or have it applied to a new contract for significantly fewer tons,” Bowen said. “It increased our nitrogen cost per acre by a minimum of $16 an acre.”

Urea prices are also higher in his area, even though soybean prices show little room to make a profit.

Bowen said it will be a busy spring in southeast Nebraska, as it will be in many places around the Corn Belt, since very little fieldwork of any kind got done last fall. In his area, no fall spraying, dirt work or ditch fixing was done at all, he said.

All eight of the major fertilizers are now higher compared to last year. MAP is 9% more expensive, potash is 10% higher, 10-34-0 is 12% more expensive, DAP is 13% higher, urea is 17% more expensive, UAN32 is 20% higher, anhydrous is 21% more expensive and UAN28 is now 23% higher compared to last year.

DTN collects roughly 1,700 retail fertilizer bids from 310 retail locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.

Retail fertilizer charts dating back to 2010 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.

DRY
Date Range DAP MAP POTASH UREA
Dec 18-22 2017 445 485 344 348
Jan 15-19 2018 456 491 345 355
Feb 12-16 2018 457 495 345 357
Mar 12-16 2018 466 503 350 368
Apr 9-13 2018 482 504 353 369
May 7-11 2018 483 505 354 366
Jun 4-8 2018 484 505 354 364
Jul 2-6 2018 485 504 354 366
Jul 30- Aug 3 2018 488 505 355 366
Aug 27-31 2018 487 513 357 365
Sep 24-28 2018 494 520 361 385
Oct 22-26 2018 499 518 366 406
Nov 19-23 2018 501 530 368 407
Dec 17-21 2018 508 532 377 407
Liquid
Date Range 10-34-0 ANHYD UAN28 UAN32
Dec 18-22 2017 405 461 218 254
Jan 15-19 2018 407 485 226 260
Feb 12-16 2018 415 492 230 264
Mar 12-16 2018 421 503 237 282
Apr 9-13 2018 427 510 241 275
May 7-11 2018 431 512 241 276
Jun 4-8 2018 440 503 241 276
Jul 2-6 2018 443 505 242 279
Jul 30- Aug 3 2018 443 498 242 279
Aug 27-31 2018 446 480 233 271
Sep 24-28 2018 449 493 236 278
Oct 22-26 2018 457 499 243 284
Nov 19-23 2018 457 520 246 287
Dec 17-21 2018 457 565 265 304

 Nitrogen fertilizers continue to lead retail prices higher the third week of December 2018, with anhydrous and UAN prices significantly higher than last month, according to prices tracked by DTN.

Anhydrous prices are 23% higher than they were a year ago with an average price of $565 per ton. (DTN chart)

It’s the second week of sharp price jumps. Six of the eight major fertilizers are higher with three fertilizers having substantially higher prices. DTN considers a price jump of more than 5% to be significant.

Anhydrous prices are 9% higher compared to last month with an average price of $565. That’s a $45-per-ton increase in the past month.

UAN28 prices are 8% higher than the prior month. The nitrogen fertilizer has an average price of $265/ton, up $19/ton. UAN32 is 6% more expensive from last month and is up $17/ton with an average price of $304/ton.

Three other fertilizers’ prices were slightly higher. DAP had an average price of $508/ton, up $7/ton; MAP was $532/ton, up $2/ton; and potash prices averaged $377/ton, $9/ton higher.

The average urea price was fractionally lower than last month at $407/ton, while starter fertilizer, 10-34-0, was unchanged at $457/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.44/lb.N, anhydrous $0.34/lb.N, UAN28 $0.47/lb.N and UAN32 $0.48/lb.N.

Noticeably higher nitrogen prices have surprised some, said Bob Spratt, manager for LeRoy Fertilizer Services located in LeRoy, Illinois. But he said the increase is due to supply reductions worldwide.

“The interesting part is the pricing didn’t ‘reset’ like it historically has after spring, so we started from a higher position,” Spratt told DTN.

But he said there’s some good news: There are some indications global supply issues may be easing, which could mean more supply heading to the market.

Less fertilizer than normal was applied in many areas of the Corn Belt this fall thanks to a slow-moving harvest and uncooperative weather.

Spratt said his area of central Illinois had a good run of phosphorus and potash application, but only about half the normal number of acres saw a fall anhydrous application. He isn’t as worried about the amount of work that needs to be done this spring.

“I’m not as worried about this as some, as my nitrogen usage is 80% UAN32 and we are a high sidedress location, so that spreads out our workload,” he said.

All eight of the major fertilizers are now higher compared to last year with prices shifting higher. Potash and MAP are both 10% more expensive, 10-34-0 is 13% higher, DAP is 14% more expensive, urea is 17% higher, UAN32 is 20% more expensive, UAN28 is 22% higher and anhydrous is now 23% more expensive compared to last year.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.

Retail fertilizer charts dating back to 2010 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.

DRY
Date Range DAP MAP POTASH UREA
Dec 18-22 2017 445 485 344 348
Jan 15-19 2018 456 491 345 355
Feb 12-16 2018 457 495 345 357
Mar 12-16 2018 466 503 350 368
Apr 9-13 2018 482 504 353 369
May 7-11 2018 483 505 354 366
Jun 4-8 2018 484 505 354 364
Jul 2-6 2018 485 504 354 366
Jul 30- Aug 3 2018 488 505 355 366
Aug 27-31 2018 487 513 357 365
Sep 24-28 2018 494 520 361 385
Oct 22-26 2018 499 518 366 406
Nov 19-23 2018 501 530 368 407
Dec 17-21 2018 508 532 377 407
LIQUID
Date Range 10-34-0 ANHYD UAN28 UAN32
Dec 18-22 2017 405 461 218 254
Jan 15-19 2018 407 485 226 260
Feb 12-16 2018 415 492 230 264
Mar 12-16 2018 421 503 237 282
Apr 9-13 2018 427 510 241 275
May 7-11 2018 431 512 241 276
Jun 4-8 2018 440 503 241 276
Jul 2-6 2018 443 505 242 279
Jul 30- Aug 3 2018 443 498 242 279
Aug 27-31 2018 446 480 233 271
Sep 24-28 2018 449 493 236 278
Oct 22-26 2018 457 499 243 284
Nov 19-23 2018 457 520 246 287
Dec 17-21 2018 457 565 265 304

While global potash (K) fertilizer prices have been at their highest levels in the last three years due to cutbacks in supply, the outlook for the market is for more capacity than new demand. Potash producers with smaller, higher-cost production facilities will likely come under heavy cost pressure.

Humphrey Knight, Potash Analyst for CRU International Ltd. in London, told attendees of the 2018 Fertilizer Outlook and Technology Conference recently in Jacksonville, Florida, that things really began to change in the potash market since about mid-2016. This is when potash became more affordable and thus led to record 2017 global demand.

GLOBAL K INCREASING

Global potash imports in 2016 totaled 61.4 million metric tons (mmt), then jumped to 66.6 mmt for 2017 imports. The U.S. even increased its imports, to just under 10 mmt, with a strong second half of 2017, he said.

Knight said, of that nearly 10 mmt in 2017, 7.7 mmt was imported from Canada, which is about a 12% increase year-on-year from there. Another 1.9 mmt was imported from overseas (mainly Russia, Belarus and Israel), which was a 44% year-on-year increase.

U.S. potash demand in 2018 is shaping up similar to 2017 with more demand for potash.

Knight said U.S. potash applications on corn increased by 24%, while soybean application climbed 18% from 2012 to 2017.

“Fall application pushed 2017 demand to a record high, with 2018 demand currently following closely,” Knight said.

Potash demand growth is set to steadily increase over the next five years across the world, Knight said. Global demand in 2018 should be around 66.8 mmt, and by 2023, demand could be closer to 76.8 mmt. This would be a compound annual growth rate of 2.8% per year during this time period.

The global growth in demand is mainly thanks to two different regions of the world: Asia and Latin America.

CHINESE POTASH NEEDS

Knight said China produces enough potash to meet about half of its domestic demand, while the other half is imported. While nitrogen and phosphorus fertilizer production in the country faces scrutiny from increasing environmental regulations, these issues do not affect the Chinese potash production because they get it from underground mines.

Despite this, the country’s domestic capacity appears to have reached a limit, about 16 mmt in 2017. CRU is no longer aware of any further investment in new or expanded potash capacity in China, he said.

“Because of this, imports are becoming more important in China,” Knight said.

Chinese farmers are applying more potash to improve the quality of crops in the country, especially fruit and vegetables. Nitrogen and phosphorus are generally over-applied in the nation while potash is under-applied, he said.

Other than China, southeastern Asia oil palm areas (Malaysia and Indonesia) are expected to expand potash usage.

Latin America is also increasing potash demand as the region expands mainly in soybean production. Lower-yielding soybean areas provide potential upside to the potash market, he said.

SEVERAL SUPPLY ISSUES

On the supply side, Knight said, potash producers have attempted to limit supply since about 2013, when companies in Canada enacted voluntary idling of facilities. However, from that time until 2017, the lower capacity really did not improve potash’s global price until 2017.

In 2017, Canadian producers have maintained supply discipline. Canada, as well as the rest of the world, have had operating rates close to their customer demand, which ends up being positive news for prices, he explained.

In addition, new capacity projects across the world have been slow to start. Knight said Russia could see another 7 mmt of production as two facilities increase capacity.

A facility in Saskatchewan, Canada, started production in June 2017, but had some issues with product quality early. This plant is expected to produce 1.4 mmt to 1.5 mmt in 2018, with no exports from it to the U.S. expected until 2019, he said.

The slowness of new production can be traced directly to increasing site costs, which have been rising since 2016.

Knight said site costs have been highest in Russia and Belarus. The recovery of the Russian ruble versus the U.S. dollar, as well as 30% higher energy and labor costs, have increased site costs by 23%.

“Margins are very tight at these locations,” he said.

Canada’s site costs increased by 12%, thanks to higher energy and labor costs, but at least these facilities have capacity increasingly concentrated in lower-cost mines, he said.

Knight said mines in Europe have site costs rising by 17% because of much higher energy costs. These mines tend to be smaller in size and also have falling grades of product, he said.

Future supply will arrive, but it will be later in the five-year window than once anticipated by the industry, he said. All additions from 2008 to 2017 were additions or expansion projects at existing facilities.

Going forward, however, most of the new potash supply will come from new facilities, Knight said. With these new plants set to come online in the coming years, about 16 mmt of new capacity could be seen, which will be a challenge for the industry.

“This is massive new supply for an industry which would have 16 mmt of new capacity and only about 10 mmt of demand,” Knight said.