International fertilizer markets continue to show a firm tone headed into spring in the Northern Hemisphere. That’s keeping U.S. costs from showing any signs of a seasonal pullback as buying windows for spring grow slimmer.
Ammonia costs edged higher last week on retail markets, even as February contracts at the Gulf settled lower. Our average retail price came in at $477, just under projected fair value of $481 based on wholesale costs. Local prices now likely depend on availability as some dealers may grow reluctant to restock inventory in the face of uncertain price and weather patterns that could change rotations. Price increases last week were relatively small at dealers updating offer sheets. USDA put the average in Illinois at $500 with Iowa at $463. Dealers elsewhere are mostly running $440 to $540 from Missouri to the southwest Plains.
Urea posted small gains on both retail and international markets last week as prices continue to consolidate after their big move off summer lows. The Gulf index was up $4.50 to $247, which translates into fair value around $390 at the retail level. Our average price is well below that at only $345, which could reflect more domestic production that costs less to get to the farm than imports. Product entering the U.S. is likely to be lower into spring as prices are higher for manufacturers in other countries. Sales into Europe last week were strong, so there’s still demand with lack of supply out of China keeping the market tight. Prices on the Plains continue to run around $320 to $350, while Illinois and Iowa are $10 to $20 above those levels. Swaps for the Gulf don’t show prices dropping much until fall, when they begin to approach the long-term quote that’s $75 cheaper than the nearby, reflecting growing U.S. and world production.
UAN was mixed last week in a market that remains very quiet. Retail prices for 28% edged a few cents higher to $213, a price that appears $23 too cheap based on replacement costs at the Gulf for 32%. The Gulf index did fall last week, losing $2.50 to 169, but swaps into summer don’t showing it get much cheaper for side dressing.
Phosphates moved higher last week as the market continues to adjust to stronger values for the nitrogen component of products. Our average retail cost was up around $1.50 to $455 for DAP, while the Gulf market was up $3.50 to $361. Wholesale costs could lose $25 by summer, but for now the market appears fairly priced, if quiet.
Potash also moved a little higher this week, reflecting ideas the market is fairly tight. Costs at the Gulf were up $1 to 236 while Midwest terminals raised their offers $4 to 271. Retail prices were up a quarter or so to $332.25, and could get more expensive if demand surfaces. Fair value based on wholesale costs is around $10 above the retail market.