After soaring to record levels, fertilizer prices are finally starting to ease.
Want an example? Josh Linville, vice president of fertilizer at StoneX, says New Orleans urea prices hit $935 per ton last year. Last week, prices were $470 per ton.
“We are half the price we were back in late March,” he says. “Everything is trending lower. Just from that simple perspective you're like, how can this not be a time to buy?”
What farmers need to keep in perspective, Linville says, is prices are still at historic levels.
“The prices have today look fantastic compared to the last few months, but we’ve only seen prices at these high levels two or three times in recent history,” he says. “When you start looking at the relationship between corn and urea or corn and UAN, that ratio is still very high versus the last several years.”
Also, he says, consider the time horizon: “We are five months away from getting back in the fields in November, we are 10 to 11 months away from next spring. Look at how these things have changed over the course of just a matter of several weeks. Imagine what can happen in a five-to-10-month range.”
The issues Linville is watching include:
Russia's exports of fertilizer are now starting to find homes around the world, which will help boost global fertilizer supplies.
China should soon announce whether or not it will export fertilizer products. If they do start exporting global supplies will increase.
If the Russia-Ukraine war ends, Europe could increase its natural gas production, which would reduce supply and decrease production costs.
“There's still a lot of things in front of us that can correct and make fertilizer prices even better,” Linville says. “That being said, if you're going to sell your grain, it's a good idea to buy some of the inputs, and if you're going to buy some of your inputs, it's a good idea to sell some of your grain.”
By SARA SCHAFER
June 7, 2022
agweb.com
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