DTN Retail Fertilizer Trends

OMAHA (DTN) -- Retail fertilizer prices tracked by DTN for the week including the last couple of days of July and the first few days of August 2023 continue to move lower. All eight major fertilizers were lower compared to a month ago.

In addition, seven of the eight major fertilizers had a considerable price move looking back a month. DTN designates a significant move as anything 5% or more.

Leading the way lower once again was anhydrous. The nitrogen fertilizer was 15% lower compared to last month and had an average price of $638/ton.

Anhydrous dropped below the $700/ton level for the first time since the first week of April 2021. That week the average price was $692/ton.

Also, double-digits lower was UAN32. The nitrogen fertilizer was 12% less expensive and had an average price of $411/ton.

The trio of DAP, MAP and urea were all 7% lower compared to last month. DAP had an average price of $766/ton, MAP $773/ton and urea $572/ton.

Both DAP and MAP fell below the $800/ton level for the first time in almost two full years. DAP was last at this level the second week of October 2021 at $798/ton, while the last time MAP was this low was the third week of September 2021 when the price was $786/ton.

Potash was 6% less expensive compared to a month earlier. The fertilizer had an average price of $579/ton. UAN28 was 5% lower looking back a month and the fertilizer had an average price of $378/ton.

One fertilizer was just slightly lower compared to the prior month. 10-34-0 was just slightly lower and had an average price of $713/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.62/lb.N, anhydrous $0.39/lb.N, UAN28 $0.68/lb.N and UAN32 $0.64/lb.N.

Decreasing fertilizer prices was the subject of a University of Illinois farmdocDaily article titled "Weekly Farm Economics: Fertilizer Prices Continue Year-Long Decline from 2022 Peak" (https://farmdocdaily.illinois.edu/…). Since peaking in the second quarter of 2022, fertilizer prices have trended downward.

There are a couple of different reasons for lower fertilizer prices, according to the report.

The cost of natural gas, the key energy input in the processing of anhydrous ammonia and other fertilizer products, has trended downward over the past year after peaking in 2022. In addition, corn prices have also declined 12% from last year's high of $7.38 per bushel in June 2022.

"Declining fertilizer prices should, on their own, point to improved prospects for farm-level returns in 2023 and 2024," the report stated.

Looking ahead to 2024, the extended downward trend in prices might suggest a wait-and-see approach to 2024 fertilizer needs. However, natural gas futures indicate market expectations for prices to move from the current $2 range back to the mid- to high-$3 range over the next six months, while corn futures suggest prices near or just below $5 per bushel for the 2024 crop.

"Fertilizer prices are also approaching levels experienced in 2021," the report said. "Therefore, market expectations and ongoing risks suggest considering the pricing of at least a portion of fertilizer needs for the upcoming year."

All fertilizers are now lower by double digits compared to one year ago. 10-34-0 is 20% lower, DAP is 24% less expensive, MAP is 25% lower, urea is 30% less expensive, potash is 35% lower, UAN28 is 36% less expensive, UAN32 is 40% lower and anhydrous is 54% less expensive compared to a year prior.

DTN gathers fertilizer price bids from agriculture retailers each week to compile the DTN Fertilizer Index. DTN first began reporting data in November 2008.

In addition to national averages, MyDTN subscribers can access the full DTN Fertilizer Index, which includes state averages, here: https://www.mydtn.com/….

Fertilizer expenses ballooned in 2022 as farmers spent almost 20% more on nutrients than the year before spending $36.8 billion, according to a recent USDA report. You can read about it here: https://www.dtnpf.com/….

Alexis Maxwell, a fertilizer analyst at Bloomberg Intelligence/Green Markets, will join the DTN Ag Summit Series on Aug. 15 to discuss what's influencing prices and whether it's a good year to book your needs early.

She specializes in financial and economic analysis of fertilizer markets and producers. Prior to joining Bloomberg, Maxwell was a market analyst at CF Industries and SABIC. While she frequently presents to investment groups and others in the financial world, she says she's looking forward to presenting to farmers.

Sign up to hear Alexis's presentation, along with the rest of the Ag Summit Series: Digital Yield Tour, here: https://www.dtn.com/….

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

Follow him on X, formerly known as Twitter, @RussQuinnDTN

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