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Review AccountFertilizer Market Outlooks Weigh on ROI
Jan 24, 2022
“Supply shortages have affected all of us over the past year,” said Ken O’Brien, Federated’s director of purchasing and logistics, and that trend looks to continue into 2022. “We saw fertilizer prices starting to climb in 2022 due to tight supplies, and some product supplies have only gotten worse.”
O’Brien recently attended a meeting with CHS Inc. (one of Federated’s key fertilizer suppliers) where fertilizer market outlooks were a hot topic. The discussions highlighted some important points. (He noted that “no one can predict the markets, and this is just one opinion [CHS’s], so take it for what it’s worth.”)
Three products likely to have the tightest supply through 2022 include UAN, phosphates, and ammonium sulfate.
“Federated Coops feels comfortable with our current supply of DAP and ammonium sulfate for our 2022 planting season,” said O’Brien. UAN supply has started to become available, however, at a premium price tag. It’s more important than ever to talk with your Federated Agronomist about the economics for your nitrogen sources.
Liquid starter fertilizer has been problematic as well, O’Brien noted. “The supply of phosphoric acid used in the production of liquid starters is extremely tight. Phosphoric acid is used in many industries and has a wide variety of uses. Many of these industries can afford to pay premium prices for the acid, limiting what makes it to the fertilizer industry.”
Pricing for liquid starters is anticipated by late January or early February. “Federated has been actively buying and positioning product all year to be able to offer a reliable supply at a competitive price,” he said.
“Thankfully, grain prices have been strong. We do not yet see much fertilizer demand destruction due to high prices. Fertilizing for top yields still makes sense.” O’Brien emphasized.
In addition to good grain prices, hay prices are very strong. With the tight hay supply, there will likely be a strong demand for potash to feed the hay crop for maximum yields. “With these hay prices, do not short its nutrient needs,” he said.
Nutrients are essential for maintaining yield potential, so talk to your Federated Agronomist to lay out plans that maximize crop yields while keeping an eye on input investments.
O’Brien recently attended a meeting with CHS Inc. (one of Federated’s key fertilizer suppliers) where fertilizer market outlooks were a hot topic. The discussions highlighted some important points. (He noted that “no one can predict the markets, and this is just one opinion [CHS’s], so take it for what it’s worth.”)
Three products likely to have the tightest supply through 2022 include UAN, phosphates, and ammonium sulfate.
“Federated Coops feels comfortable with our current supply of DAP and ammonium sulfate for our 2022 planting season,” said O’Brien. UAN supply has started to become available, however, at a premium price tag. It’s more important than ever to talk with your Federated Agronomist about the economics for your nitrogen sources.
Liquid starter fertilizer has been problematic as well, O’Brien noted. “The supply of phosphoric acid used in the production of liquid starters is extremely tight. Phosphoric acid is used in many industries and has a wide variety of uses. Many of these industries can afford to pay premium prices for the acid, limiting what makes it to the fertilizer industry.”
Pricing for liquid starters is anticipated by late January or early February. “Federated has been actively buying and positioning product all year to be able to offer a reliable supply at a competitive price,” he said.
“Thankfully, grain prices have been strong. We do not yet see much fertilizer demand destruction due to high prices. Fertilizing for top yields still makes sense.” O’Brien emphasized.
In addition to good grain prices, hay prices are very strong. With the tight hay supply, there will likely be a strong demand for potash to feed the hay crop for maximum yields. “With these hay prices, do not short its nutrient needs,” he said.
Nutrients are essential for maintaining yield potential, so talk to your Federated Agronomist to lay out plans that maximize crop yields while keeping an eye on input investments.