Fertilizer Exec Expects Wild Ride


By Russ Quinn, DTN Staff Reporter

OMAHA (DTN) – Retail fertilizer prices tracked by DTN don’t reflect it yet, but prices are expected to remain volatile for at least several years, according to fertilizer company executives.

In an article titled “High Food Prices Continue to Support Fertilizers” on the website Potash Investing News, dated May 25, author Leia Michele Toovey reported executives told a group of stock analysts and investors at the BMO Capital Markets Farm to Market Conference in New York held May 17-18 that the volatile market will remain in crop and fertilizer prices in the coming years.

“We’re seeing strength in the commodity sector across the board,” said David Honeyfield, president and chief financial officer of Intrepid Potash Inc.

Honeyfield said higher grain prices mean farmers will be able to pay for more expensive inputs like potash or other fertilizers. While maybe not good news for the farmers purchasing fertilizer, this news would be welcomed by investors of fertilizer companies.

Low stockpiles of grains will be the main reason why the grain and fertilizer markets will see so much volatility over the coming months, he said. Any news dealing with increasing demand or decreasing supply could send grain prices, and thus fertilizer prices, moving as there is no grain surplus to buffer supply issues.

Honeyfield also said it may take years to rebuild the grain stockpiles.

“It takes two or three really good growing seasons to make a dent,” he said.

The article can be found at http://potashinvestingnews.com/….

Retail fertilizer prices have been relatively calm in recent weeks, with the exception of 10-34-0, DTN’s weekly survey of more than 150 fertilizer retailers shows. Starter again leads the way higher, up 7{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} compared to one month earlier. The starter fertilizer had an average price of $821/ton.

Three other fertilizers were higher compared to the fourth week of April. MAP, potash and urea were all up just slightly. MAP had an average price of $707/ton, potash $604/ton and urea $505/ton.

The remaining four fertilizers, DAP, anhydrous, UAN28 and UAN32 were all just slightly lower compared to last month. DAP had an average price of $679/ton, anhydrous $745/ton, UAN28 $376/ton and UAN32 $426/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.55 per pound of N, anhydrous $0.45/lb. N, UAN28 $0.67/lb. N and UAN32 $0.67/lb. N.

All eight major fertilizers are now showing double-digit increases in price compared to one year earlier. Leading the way higher is 10-34-0. The starter fertilizer has skyrocketed in recent weeks and is now 106{dfeadfe70caf58f453a47791a362966239aaa64624c42b982d70b175f7e3dda2} higher compared to the fourth week of May 2010.

© Copyright 2011 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.

Posted with DTN Permission by Haylie Shipp


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