DTN Retail Fertilizer Trends

By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- As has been the case over the last couple of months, some retail fertilizer prices are showing noticeable declines the third week of February 2016, according to retail fertilizer prices tracked by DTN. All eight major fertilizers were lower compared to a month earlier.

Anhydrous slid 7% compared to last month and the nitrogen fertilizer averaged $538 per ton. Both MAP and UAN32 were down 5% compared to a month earlier. MAP averaged $496/ton and UAN28 was at $259/ton.

The remaining five fertilizers edged lower but just slightly. DAP averaged $477/ton, potash $375/ton, urea $370/ton, 10-34-0 $565/ton and UAN32 $309/ton.

On a price per pound of nitrogen basis, the average urea price was $0.40/lb.N, anhydrous $0.33/lb.N, UAN28 $0.46/lb.N and UAN32 $0.48/lb.N.

In the most recent edition of the Agricultural Economic Insights e-newsletter, economist David Widmar writes the source of nitrogen fertilizer in the U.S. has shifted since the 1960s. While anhydrous remains fairly popular with farmers, nitrogen solutions and urea have become more widely used. During that same period, ammonium nitrate became less popular.

The price of anhydrous, urea and 28% liquid nitrogen have all trended lower since 2012, Widmar noted, using data from the Market News Service's Illinois Production Cost report. Urea prices are at their lowest level in the six years of that report while anhydrous and UAN28 were lower but not at their lowest price during the report.

The price relationship between urea and anhydrous shows that urea is at historically low levels compared to anhydrous, he wrote.

"Over the previous six years, urea was, on average, 1.21 times the price of anhydrous ammonia," Widmar wrote. "Currently, urea is relatively cheap to anhydrous ammonia at 1.15 times the price. In previous years, urea has only occasionally been priced below 1.10 times the price of anhydrous ammonia."

The price relationship between 28% and anhydrous ammonia was also explored. On average, the price of 28% is 1.35 times the price of anhydrous. He wrote current 28% prices are at 1.39 times the price of anhydrous.

Widmar points out overall urea prices have fallen the most. Anhydrous prices have fallen faster than UAN28 prices. These lower prices do represent a real cost saving for farmers purchasing and applying nitrogen fertilizers.

"For example, a producer using anhydrous ammonia and applying 175-70-70 units of nitrogen, phosphorous and potash would notice fertilizer expense nearly $32 per acre lower than last spring," he wrote. "These are significant, but by themselves are not enough to restore economic profitability."

To read the entire Agricultural Economic Insights "Nitrogen Fertilizer Sources" article, go to http://goo.gl/….

According to DTN's weekly retail surveys, all fertilizers are lower compared to a year earlier. All but one fertilizer is now double digits lower. The only fertilizer not down much is 10-34-0, which is down 5%.

However, DAP is now 16% lower, both MAP and UAN32 are 17% less expensive and both UAN28 and urea are now 22% less expensive than a year ago. In addition, both potash and anhydrous are 24% lower compared to a year earlier.

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

(MZT/AG)

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