Farmers advised to buy available fertilizer now

Fertilizer values are headed up and experts advise farmers to buy sooner than later.

Urea, ammonia and urea ammonium nitrate values will continue to rise, says Brian Gross, product strategy manager of crop nutrition with UFA Co-operative.

World demand versus supply is such that there will still be a deficit in North America, he says. Gross recently observed no open offers from manufacturers at any price for the near future, suggesting to him manufacturers were watching the world market and would adjust prices accordingly when they decided to offer contracts.

Experts predict a worldwide fertilizer shortage in North America. It may be better to purchase the input now rather than wait until spring.

Nitrogen hit

Saskatchewan grain producer Norm Hall, who is also first vice-president of the Canadian Federation of Agriculture, says higher nitrogen prices will really hit farmers.

“Right now, I’m paying around $70 a tonne more for urea than I did last year,” says Hall.

That breaks down to $7 to $8 per acre, adding up to a potential $40,000 extra on his 5,000-acre operation, Hall says.

A rapid harvest and open fall would allow farmers to apply nitrogen, but inclement weather has stalled field operations in many areas.

“Other years when it’s a tight fall and nobody gets anything down, that just puts pressure on the supply chain come spring,” says Ryan Furtas, input market analyst with Alberta Agriculture.

More increases

Phosphates will probably rise as well, but not as dramatically as the nitrogen products, Gross says.

“We are net importers so any blip in production will be magnified,” he adds.

More than a blip is Nutrien’s conversion of its Redwater, Alta. phosphate facility – the only phosphate producer in Canada – to produce ammonia sulphate.

Gross also predicts an increase in sulphate prices.

“There is one main supplier that currently is sold out until at least December,” he says. “Imports can aid supply, but the current exchange rate is not favourable or even equitable.”

Buy now

Gross urges producers buy now and store it.

“Many, if not most retailers, have sold out their inventory positions and need to base retail prices on the replacement, if there are even tonnes available, which in many cases there is not.”

Hall is also looking to buy sooner than later.

Furtas agrees that history proves it’s wise to spread out buying through the fall and winter months instead of buying at peak demand season.

Bottom line

Bullish fertilizer forecasts and potential peak season bottlenecks indicate now’s the time for farmers to buy.

Article by: Richard Kamchen


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