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The 2014 Buyer’s Forecast from Farm Industry News offers insight into the projected prices for seed, crop protection, machinery, fertilizer, land and financing this week. Here we look at fertilizer prices for 2014.
N application investments
Despite additional time-management challenges, N applications tend to be more profitable if done during spring. “With N fertilizer, spring applications are the best bang for your buck,” says Hart. “The best uptake of N with the least waste occurs when applications are made in spring rather than fall.”
Farmers might consider using high-clearance sprayers and other new equipment technologies that enable them to extend N applications over a longer period during spring than with standard sidedress equipment, says Vince Reincke, marketing manager at Strategic Farm Marketing, Hillsboro, Ill. “Producers need to look at ways to stay flexible in timing their applications without losing their pricing flexibility,” he says. “To do that, farmers might also consider adding storage facilities for their N needs.”
Flexibility, efficiency and price are all important considerations when making purchase decisions, adds Reincke, who grows corn, soybeans and wheat, in addition to being a licensed commodity broker and crop insurance agent. “Anhydrous is consistently cheaper on a per-unit basis, but the timing for it is generally less flexible than other sidedress N products,” he says. “So, many farmers are moving to a liquid-N application, even though it is more expensive than anhydrous, because it’s easier and safer to store, handle and apply.”
According to USDA data on annual fertilizer use, anhydrous ammonia applications in the U.S. have been steady with a slight downward trend over the last 30 years, points out Erickson. In comparison, both urea and liquid-N solution have shown a recent upward trend in use, he says.
Farmers who act soon could lock in a good price for N fertilizer products, whether or not they intend to apply them right away, notes Hart. “The current low fertilizer prices this fall offer a good pricing opportunity, even if farmers plan to apply the product in the spring,” he says. “If you wait until spring to purchase fertilizer, prices might move against you, and supply might also move against you.”
Industry analyst Kevin Van Trump, Farm Direction CEO, Raymore, Mo., concurs. “We’re telling our clients to call around to suppliers and compare pricing for this year, and also look at what you paid in previous years,” he says. “Right now, nitrogen prices are down to where we haven’t seen them since 2009.”