Phosphoric Acid, Phosphates & Fertilizers Experts

Fertilizer costs rise despite weak crop prices

Growers who didn’t move fast to secure fertilizer for 2019 likely will pay more for not seizing the day. Price increases rumbled through the market last week just as retailers started posting prices again.

Ammonia is still cheaper than the bill paid by growers this spring. But manufacturers raised offer sheets quickly, which should add around $20 a ton to costs for growers booking fall supplies. Growers with on-farm storage who can take delivery this summer could still be paying an average of about $100 less than this April’s $492 expense, and costs on the Plains could be $45 less than that. Those who can back up a tanker to the plant are looking at $280 or so out west to $320 in the Corn Belt. While U.S. demand for fall application will likely be sluggish due to low prices and other concerns, a lot of facilities around the world are struggling to maintain production, keeping free supplies tight this summer.

Urea is still the canary in the coal mine for the complex. While our average retail cost softened a little this week, wholesale values jumped last week, with the Gulf up $12 to $250. That could raise average retail costs above $390 this summer as dealers replace inventory used on 2018 crops. However, the swaps market doesn’t show any increases through much of the fall, suggesting the market may not have much upside either. Still unclear is what will happen to Iran’s supplies. Crude oil prices jumped this week after the U.S. told allies to stop importing from Iran by November.

UAN costs were a little higher last week on average reflecting price hikes from earlier in the month on late side-dressing demand. But costs at the Gulf are dropping suggesting potential buying opportunities later this summer. The price of 32% at the Gulf was down $1.50 to $171, and swaps into August show the market down another $10. That could cut the average retail expense for 28% down to $225, $10 to $15 below the current market.

Phosphates were higher again this week and more offer sheets could show increases when new prices are posted. Our average was up $2 to top $491, and some sheets are up to $500, reflecting incremental increases by manufacturers. Swaps don’t show much if any increase into the fall, however, which should limit how much prices can go up.

Potash took another step higher on wholesale markets last week, suggesting growers looking to book fall supplies will be paying more too. Though our average spot retail price slipped 75 cents to $344.75, current wholesale costs translate to a cost $15 higher. Values at the Gulf were up $7 to $255, with Corn Belt terminals $5 to $280, for those who can buy direct. China’s next big purchase due soon should set the tone for the global market headed into the fall.