While U.S. fertilizer markets have increased in the run-up to spring field work, retail fertilizer prices are still lower than this time last year, analysts say.
A late harvest last fall, uncertainty over acreage allocation for corn, and a hard winter had many U.S. growers deferring fertilizer purchases and application until spring. Fertilizer prices fell in response to the lack of demand.
Expectations of a large spring application, however, has created a bullish market in the U.S., with an upside price potential for all fertilizers, said Dirk Jan Kennes, an analyst with Rabobank.
“The U.S. price in general has been increasing as of the start of 2014,” he said.
Retail fertilizer prices are higher than a couple of months ago but lower than this time last year, said Glen Buckley, chief economist for NPK Fertilizer Advisory Service, headquartered near St. Louis.
Based on the average Midwest spot retail price, ammonia is $660 a ton compared with $865 in March 2013. Urea is $520 a ton, compared with $565 last spring. UAN (urea ammonia nitrate) is $392 a ton, compared with $430 in March of 2013. Phosphate is $553 a ton, compared with $620 last March, and potash is $460 a ton, compared with $571 in March 2013, he said.
Midwest spot retail ammonia prices will probably hold through spring, Urea prices have peaked and will likely drop to $465 a ton by May. UAN will probably increase slightly to $412 a ton and drop to $370 by the end of spring. Phosphates could increase to $580 a ton, and there’ll likely be no change in potash, he said.
Fertilizer prices in the Pacific Northwest and on the West Coast are typically higher than the Midwest due to market differences and transportation costs, but generally move in the same direction as Midwest prices, said David Asbridge, president of NPK Fertilizer Advisory Service.
NPK’s year over year forecast for spring fertilizer prices is a 25 percent decline in anhydrous ammonia, a 5 percent to 8 percent decline in UAN, a slight decline to flat in DAP (diammonium phosphate), and a 20 percent decline in potash, he said.
Lower prices in the spring peak suggest annual average fertilizer prices will be down along those lines, but many things could affect that assumption, he said.
NPK is keeping its eye on the situation in Russia — which is a major exporter of nitrogen, phosphate and potash — and Ukraine, which is a fairly big exporter of urea products. So far, there have been no disruptions in fertilizer movement, but that could change quickly, especially if world sanctions are placed on Russia, he said.
The situation in Iran, a urea exporter, is also a concern, and markets are always watching China’s export tariffs on nitrogen products.
Other things that could disrupt markets include any issues in Canada, a large potash exporter, and the Mideast, which exports nitrogen and phosphate, as well as hurricanes hitting Florida, a large phosphate producer, he said.
Fertilizer dealers contacted by Capital Press would not quote prices but said prices are lower than last year.
Crop consultant Rod Lake, Burley, Idaho, said fertilizer costs are down 15 to 20 percent compared with spring 2013, saving potato farmers about $50 an acre.
Paul Patterson, University of Idaho ag economist, said he’s expecting a 3 to 8 percent year-over-year decrease in Idaho growers’ annual fertilizer costs in 2014.
NPK Fertilizer Advisory Service: http://npkfas.com/