Phosphoric Acid, Phosphates & Fertilizers Experts

Fall fertilizer costs jump higher again

Fertilizer costs moved mostly higher last week, with some products up sharply as dealers buying new inventory faced bigtime sticker shock in wholesale markets. The latest urea tender from India as expected resulted in major price increases due to lack of Iranian supplies, sending shockwaves through the complex.

Ammonia cost more last week on both retail and wholesale markets, even though a deluge of rain this week could slow harvest and fall applications. Drier and cooler weather into the end of October could turn the tide for fieldwork, but high nitrogen costs and unprofitable corn margins could keep some growers on the sidelines for now. While our retail average for ammonia was up around $2 a ton to $494, many growers can expect to pay at least $20 to $30 more. Wholesale values on the Plains and Corn Belt jumped $15 to nearly $40 higher as plants can hold back ammonia to make urea rather than sell it directly.

Urea remains the bell cow for a bullish fertilizer market. Average retail prices were up $4.50 last as dealers replacing inventory confronted a global market that took another leap forward. The cost at the Gulf was up $16.50 to $316, an increase that flowed up river for suppliers hoping to get product into position. While our average price is at $392.50, dealers posting new offers last week were significantly higher, in the $410 to $440 range, closer to our projected replacement cost of $434 given current conditions. Swaps at the Gulf into December are another $10 higher as well. India was unable to buy Iranian urea at its big tender last week due to U.S. sanctions, which brought offers nearly $80 a metric ton higher than the last big purchase in August

UAN continues to generate limited demand seasonally as far as growers are concerned. But growers securing supplies from dealers replacing inventory can expect to pay sharply higher prices. Our average cost for 28% as up less than a dollar to $241. But replacement costs could be $55 or more higher than that based on what’s happening on the wholesale market. Costs at the Gulf for 32% rose $10 to $212.50 and swaps show mostly rising costs into spring. The U.S. continues to export more UAN, with shipments in August up 30% over levels from 2017.

Phosphates showed more mixed signals last week as rising phosphate rock production is offset by higher costs for nitrogen and sulfur. Our average retail value for DAP was up $2 last week to $513, but the index at the Gulf weakened $2.50 to $421.50. Current retail charges look fairly valued according to projected replacement costs, with questions remaining about whether growers will delay or cut back phosphate applications in light of poor margins. Swaps show slightly lower prices in December, reflecting that attitude.

Potash chugged higher again last week in a market that’s seen steady price increases since making a long-term bottom two years ago. Average retail costs were up $3.25 a ton to top $362 last week, with wholesale markets also firming. Corn Belt terminals are at $300, and most growers can expect to pay $50 to $100 above that depending on their market and distance from supplies. Summer imports into the U.S. were up more than 10% from last year, as suppliers expect good demand.