Minnesota Farmers Union

(September 26, 2010) - Before anyone smiles too broadly about today’s grain prices, they might want to take a peek at fertilizer prices. If so, they’ll discover, as DTN reporter Russ Quinn recently did, that the only price rising faster than either corn or wheat’s is fertilizer.

“Six fertilizers have seen double-digit increases in price compared to one year earlier,” noted Quinn on Sept. 21. “Leading the (way) higher is DAP, which is up 48 percent, followed by anhydrous at 47 percent, MAP at 43 percent, UAN28 at 37 percent, UAN32 at 26 percent, 10-34-0 at 15 percent and urea at 10 percent.”

While no one is forecasting a return to the smash-mouth prices—$1,200 anhydrous and $1,000 potash—seen in 2008, the last high-grain price year, no one has ruled ‘em out, either. After all, higher grain prices seem to breed higher fertilizer prices like tougher times seem to breed more bank robbers.

There are, however, two reasons for today’s upward prices. First, rising demand because of previous cutbacks (largely due to those lunar, 2008 prices) and two years of wet weather that has washed most fertilizer reserves down the creek is kicking up demand, squeezing supplies and fueling prices.

(March 23, 2009) - Every spring brings its own risks for what is undeniably a risky profession. That being said, it seems to us that the challenges farmers face this year are greater than normal.

The first challenge is fertilizer. With fertilizer prices headed to the sky last summer, some farmers decided to protect themselves against even higher prices by contracting ahead for this summer's prices. As we all know, prices went south and what might have been a wise decision leaves some farmers facing unusually high input costs. For those farmers it will take ideal weather and extraordinarily high yields to take some of the sting off those high costs.

But, farmers weren't the only ones last summer who booked 2009 fertilizer orders at high prices. Lots of fertilizer distributorships are now holding large quantities of expensive fertilizer. With prices substantially lower, we are watching a stare-down contest between farmers who want lower priced fertilizer and dealers who want to minimize the financial blood-bath that is awaiting them. Each side is waiting for the other to blink first.