DTN Retail Fertilizer Trends

By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- The majority of retail fertilizer prices edged higher the third week of March as demand ramps up for the spring fertilizer application season, according to prices tracked by DTN. In recent weeks some prices accelerated, but this is the first week most of the major fertilizers strengthened in price.

Five of the eight major fertilizers were higher compared to a month earlier. UAN28 is 6% higher compared to last month, while urea and anhydrous were both 5% higher. UAN28 averaged $276/ton, urea $390/ton and anhydrous $566/ton.

Two fertilizers were higher in prices but the move to the high side was fairly minor. MAP averaged $499/ton while UAN32 was at $312/ton.

The remaining three fertilizers were lower in prices compared to last month but again the move was fairly small. DAP averaged $477/ton, potash $369/ton and 10-34-0 $560/ton.

On a price per pound of nitrogen basis, urea averaged $0.42/lb.N, anhydrous $0.35/lb.N, UAN28 $0.49/lb.N and UAN32 $0.49/lb.N.

AMOUNT OF GAINS A SHOCK

It continues to be an early start to spring fieldwork in most of the Midwest. Bret Tuxhorn, location manager for Central Plains Coop located in Athol, Kansas, said he estimates his region of north central Kansas is a good month ahead of normal. This could be bad news for the rapidly growing wheat crop if the weather turns cold, he said.

Tuxhorn said all the wheat has been top-dressed for quite a while now and many farmers are turning their fertilizer applying attention to the upcoming milo and soybean crops. The early fertilizer application season is the reason for the higher retail fertilizer prices, he said.

"This is why fertilizer prices have been climbing higher," Tuxhorn told DTN. "And they haven't been $5 to $10/ton increases but more like $45/ton price increases."

This spring's price spike is not a complete surprise, but the amount of the price jumps have been a bit of a shock. When the mild weather allowed farmers to apply fertilizer, there was a large demand for the product across the Midwest. There are not enough ways to get that much product out to farmers when demand comes in all at once, he said.

The good news in this spring price rise is that higher prices will not be present forever. Basic supply and demand means when the demand is less, fertilizer prices should decline.

"Short of commodity prices climbing, I think we should really see fertilizer prices drop some after we move through this high demand time period," he said.

STILL CHEAPER VS. LAST YEAR

Compared to a year ago, all fertilizers are now double-digits lower except for 10-34-0. It is now down 9%.

UAN32 is now 15% lower, both DAP and MAP 16% less expensive and both urea and UAN28 are 17% lower from a year ago. In addition, anhydrous is 20% lower and potash is 25% less expensive 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

Follow Russ Quinn on Twitter @RussQuinnDTN

(MZT/BAS)

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