$400 a Ton Anhydrous?

My Generation

Some retailers are passing along fall ammonia bargains.

Published on: June 8, 2009

Anhydrous for $400 a ton? It wasn’t so long ago that anhydrous prices were two, and bordering on three, times higher than that. But retailers are reportedly offering fall contracts at that very price.

 

Fertilizer’s price saga continues. When I was in high school, I remember my dad complaining that anhydrous might hit $300 that year. Last year, we saw early prices around $1,100. When my husband locked some of ours in at $900, we thought we had a bargain. Ha. We weren’t alone, though, for better or worse.

 

Jean Payne, head of the Illinois Fertilizer and Chemical Association, says manufacturers are dropping prices, and retailers are simply passing them along to farmers. She also says retailers will be more eager to sign contracts this year, given what happened in 2008. Bankers don’t want to see retailers “sticking their necks out and buying inputs without contracts with growers to buy those inputs.”

 

Will P and K go back up? Payne thinks it’s a possibility. At some point, producers will have to make up for the P and K they cut this past year. “Eventually the P & K has to go on to keep up soil fertility,” she says. The world market may tinker with prices, too. Manufacturers reportedly cut production significantly last year, due to low demand. And if inflation kicks in and the dollar drops, fertilizer becomes a better buy internationally. And that sets us up for another unfavorable supply and demand situation. The saga continues... 
                                                                                     

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