DTN Retail Fertilizer Trends

By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- Average retail fertilizer prices continued to shift lower the second week of January 2016, according to fertilizer retailers surveyed by DTN. For a third week in a row, some fertilizers registered notable price declines.

Seven of the eight major fertilizers edged lower compared to a month earlier with three fertilizers down by some significance.

DAP prices deflated the most, now down 7% compared to last month. The phosphorus fertilizer had an average price of $495 per ton.

Also moving lower were potash and anhydrous. Both fertilizers declined 5% from a month earlier. Potash had an average price of $391/ton and anhydrous $581/ton.

Four other fertilizers were lower, but none were down significantly. MAP had an average price of $521/ton, urea $381/ton, UAN28 $272/ton and UAN32 $319/ton.

One fertilizer had a slightly higher price compared to last month. 10-34-0 had an average price of $572/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.41/lb.N, anhydrous $0.35/lb.N, UAN28 $0.49/lb.N and UAN32 $0.50/lb.N.

Retail fertilizer prices on a steady decline since late 2015 is good news for farmers, but maybe not the best news for fertilizer retailers attempting to plan for their fertilizer needs. Clarke McGrath, Iowa State University (ISU) Extension field agronomist located in west-central Iowa, said one trend he has noticed this winter is farmers seem to be less willing to pre-pay for fertilizer.

"They are making a bet that spring pricing might be lower than pre-pay on N, P and K," McGrath told DTN. "So far that looks like a decent bet, even if prices do move some."

McGrath, who was a fertilizer retailer himself before going to work for ISU Extension, said he doesn't expect large enough fertilizer price movements in the coming weeks or months to change fertilizer cost per acre too much. One item that seems clear is fertilizer prices should be considerably lower this spring compared to last, he said.

Another trend McGrath is seeing in his west-central Iowa location is farmers changing their spring nitrogen application plan from liquid UAN toward anhydrous, mainly because of the cheaper cost of anhydrous. Farmers are trying to limit input costs as profitability is in question, he said.

"We see this plan fairly regularly, and if the weather doesn't cooperate (this spring), the tonnage shifts back from planned anhydrous toward 28%/32%," he said.

Farmers will utilize UAN more in wet springs as it is faster to spray on liquid nitrogen than it is to inject anhydrous. Also, farmers can get liquid on with fewer issues relating to compaction and anhydrous burn if the window between application and planting is tight or if they end up planting first and applying nitrogen pre-emerge, he said.

With retail fertilizer moving lower in recent months, all but one fertilizer is now double digits lower compared to a year earlier. The only fertilizer not down much is 10-34-0, which is down 2%.

MAP is now 12% lower than the same week a year ago; both DAP and UAN32 are 13% less expensive; and UAN28 is 16% lower than a year earlier. Both anhydrous and urea are 18% lower, and potash is now 20% less expensive compared to 2015.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.

Retail fertilizer charts dating back to November 2008 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.

DTN's average of retail fertilizer prices from a month earlier ($ per ton):

Russ Quinn can be reached at russ.quinn@dtn.com

(AG)

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