Fertilizer Outlook - Fertilizer prices finally crack a little
Retail fertilizer prices stayed stubbornly high through the winter and early spring, reflecting a supply chain disrupted by weather delays and logistical issues. While floodwaters remain, product appears to be moving a few places, with even some bargains surfacing though others terminal are still raising prices.
Ammonia could be one place to look for a few deals, as some inventory may go unused if farmers are forced to switch to other products. Our retail average slipped a buck a ton to $579 this week, but even more weakness was noted on the wholesale market. The international market remains soft, with prices out of Black Sea down this week and costs from some plants on the southern Plains broke as week, allowing a few aggressive buyers to haul long-distance for supplies. Prices could eventually tumble when product can move freely, though that likely will provide relief only for those with on-farm storage who can buy when the spring application season is over.
Urea costs headed in different directions depending on which end of the supply chain you’re on. Average retail prices slipped nearly $3 but are still only slightly off highs at $381.50. But the market at the Gulf headed $3 higher from recently lows to $252. Demand surfaced up river, where costs were up that much or even more in areas where barges won’t be able navigate for the rest of the month. The international market also showed signs of trying to confirm a bottom as India filled its latest big tender. Swaps for summer show urea backing off at the Gulf again after staying firm in April.
UAN could see increased demand at some point this spring, due either to weather or farmers looking to spoon feed nitrogen to save money But that demand has yet to arrive. The cost of 32% at the Gulf slid another $5 to $160. Wholesale prices are down $50 or more from last fall’s highs, but the retreat has only just begun at the retail level, where prices haven’t adjusted much. While the retail value of 28% is around $268, it could drop to $220 in May if supplies can get where they’re needed.
Phosphates are yet another market trying to play catch up. Retail charges for DAP finally are beginning to break at some locations, with our average down $6 this week to $508. But the after dropping $80 over the fall and winter, wholesale prices headed in the other direction, with the Gulf up $3 last week to $336. Supplies may be especially tight in the upper Midwest this spring keeping prices from breaking much, with better deals available further south.
Potash is still fairly quiet, with spring weather keeping demand under wraps. Our average retail priced moved up $2 to $383, though the Gulf eased a buck to $275, with Midwest terminals steady at $317. Retail prices could edge a little higher on average unless growers cut back on applications.