Fertilizer market tight; new pricing tool unveiled

The fertilizer market could remain tight in coming months, based on a report released last month.

Dan Grant

Published: Jul 2, 2012

The International Fertilizer Industry Association (IFIA) last month projected world fertilizer demand will continue to expand through 2016.

Demand the next five years was projected to grow annually by 3.7 percent for potash, 2.3 percent for phosphates, and 1.5 percent for nitrogen.

“Reduced inventories and strong crop prices are expected to persist in the agricultural commodity markets because of the need to supply the fast-rising food, feed, fiber, and bioenergy markets,” said Patrick Heffer, director of IFIA’s ag service. “This is anticipated to stimulate fertilizer demand.”

The industry is expected to boost fertilizer production as well. But delays in expansion projects, combined with increasing demand, is expected to keep the fertilizer markets tight near-term.

About 250 new fertilizer plants around the world are projected to come on line in the next five years. But, about half of the projects face delays ranging from six to 18 months, which will slow the expected growth in capacity.

Farmers who struggle to find pricing information for fertilizer and other inputs for comparative purposes now can use a new tool to shop around.

Pro Farmer last month unveiled an inputs monitor service that is free at least into August. Farmers and others interested in farm input prices can use the online service at www.inputsmonitor.com.

Users of the inputs monitor can click on the region of their state to get price quotes. The price quotes are from actual retailers in each area, although the retailers won’t be listed by name.

“The whole goal is to level the playing field in the inputs market,” said Chip Flory, Pro Farmer editor. “Farmers can easily compare offers (for input products) in their district and across their state.”

The price survey for the inputs monitor includes more than 300 retailers in 12 Midwest states, including Illinois.
Flory said the need for more price transparency in the fertilizer market began in 2008 when commodity prices peaked and then retreated, which left numerous retailers holding the bag in the form of overpriced fertilizer.

“A lot of dealers got caught holding high-priced inventory. They don’t hold that kind of inventory any more,” Flory said. “Price movement (as a result) has gotten clouded over time.”

Pro Farmer plans to add the inputs monitor to its risk management products, which means Pro Farmers specialists will make purchase recommendations for everything from fertilizer to diesel fuel.

Farmers in Illinois also can get input price information via the Illinois Production Cost Report released every other week by the Illinois Department of Agriculture’s market news service.

Information about the Illinois report can be obtained by calling 888-458-4787 or online.

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