After years of low prices, fertilizer prices are climbing. “Fertilizer prices have been in decline for a good six years now, which is significant, but our average fertilizer price has climbed above the three-year average,” says Davis Michaelsen, Pro Farmer Inputs Monitor Editor. “It started to climb around the first of 2018 and leveled off during the summer—part of that is seasonal demand.” One takeaway is to consider buying in the off season.
Because weather is pushing harvest further and further behind, there is opportunity for fertilizer demand to erode, which could mean dealers lower prices to move product. Pay extra attention if you’re in an area that had rain, snow or other harvest delays. “The other side of that coin is that spring demand will be high, and we did see shortages last spring that had a pretty major impact on prices—I think we may have that to look forward to next year,” Michaelsen says. “From current prices I don’t see much more than a 5% decrease in the off season, but it could be worth waiting for that January, February timeframe.” As of mid-October, anhydrous was steady above $500 per ton and Michaelsen anticipates that number could jump to $575 during spring—a 15% increase. UAN 28% and 32% and urea will likely follow that trend with about a 15% price increase this coming spring. However, P and K likely won’t see sharp price increases because it’s already priced on the high end. “Phosphates especially have been overpriced for over a year now when compared to other fertilizers,” Michaelsen explains. “Phosphate prices are being held higher because of the prices of what it takes to make it. Until we see those prices decline, phosphate product prices can’t come down.” He says demand for P and K is stable year over year, so he doesn’t expect to see any demand destruction like what you’ll see in nitrogen. He doesn’t expect much increase in P and K prices, at most another 2% to 3% by spring, but fall is the peak demand for these nutrients. “We generally see as much as a 10% savings by waiting and booking [nutrients] in the off season,” Michaelsen says. “This year it’ll average out to about 5%, not as big as we usually see, but still an opportunity to save.” Stay tuned for more Input Forecasts on AgWeb covering fuel, seed and farm chemicals later this week.