Fertilizer industry experts have been watching the prices for all kinds of nitrogen sources during the winter months. The question is what they’re seeing as we draw closer to the start of spring fertilization and planting. Josh Linville, vice president of fertilizer for StoneX, talked about what he’s seeing as we head into what could be a very early season for anhydrous rigs in the Midwest.
“So, unfortunately, what I’ve been seeing is a lot of reasons for farmers not to want to hear anything I have to say, because not very much of it has been good news. Of course, a lot of what we watch is Gulf-based. It’s NOLA-based because that’s kind of our base point for North American fertilizers. And since the first half of December, when urea prices dipped to their lowest level, prices have been up over $100 a ton since that point in time, and a lot of that continues to be driven globally. It’s a lack of Chinese export expectations. It’s a lack of European production. There’s still a 75 percent production rate. It’s Trinidad’s production issues. It is fear of a U.S.-Iran fight shutting off flows from the Persian Gulf.”
It’s hard to predict the exact need for nitrogen this year because of the corn crop.
“We keep building this corn crop. It keeps getting to be a bigger number being discussed by the marketplace, and that builds nitrogen demand overall. So, that has just continued to provide more and more price strength to the urea market. But to your point, Anhydrous rigs are already running a full month ahead of when they would normally do it around here in Kansas City—St. Joseph (Missouri) area. Hearing a lot of great forecasts, a lot of fields being cleared off, drying off, frost coming out across large parts of the Corn Belt. We could have an exceptionally early start to anhydrous, and if the forecast continued to hold, it could be a very early and long run.”
He said most farmers are looking at anhydrous, which eventually could affect the price.
“Anhydrous is still the cheapest form of nitrogen out there to the farmer, and if they get the chance, I think you’re gonna see them pile onto it. That’s gonna have some impact on the anhydrous price, of course, but you could start stealing some demand away from things like urea and UAN if this continues.”