DTN Fertilizer Outlook

February Weather Affects US Fertilizer Production, Wholesale Prices

Yara and Mosaic agreed on a Tampa ammonia contract price for March of $445 per metric ton cost-and-freight (CFR) -- up $115 on the $330 CFR agreed for February. This is the single largest monthly adjustment at Tampa since April 2014 and the highest settlement between Yara and Mosaic since September 2015. (Chart courtesy of Fertecon, Agribusiness Intelligence, IHS Markit)

The following is a breakdown of wholesale prices and trends of the various fertilizers in February and the first two weeks of March 2021.



February proved to be an extremely bullish month in U.S. ammonia, as an already tight supply scenario driven by short availability and plant turnarounds was exacerbated by a winter storm that brought chemical production in the southern U.S. to its knees.

Factories of all industries -- including fertilizer plants -- shuttered midway through February as unusually cold temperatures and heavy snowfall in the southern and central U.S. caused natural gas prices to skyrocket, making it more profitable for nitrogen fertilizer producers to sell their feedstock contracts than to upgrade into fertilizers. In Texas, Oklahoma and Louisiana, plants that did not opt to idle initially still shuttered due to power outages and rolling blackouts in the region or being cut off from gas suppliers entirely.

After the weather pattern cleared ahead of the last week of February, the U.S. ammonia market remained mostly quiet with many nitrogen plants still undertaking repairs or producing volumes intermittently. Producers were said to be struggling to ramp production back to capacity after some saw forced "cold" outages, which damaged equipment and necessitated longer turnaround periods.

In early March, ammonia was reoffered in the Corn Belt and in much of the U.S. at $100 to $125 higher per short ton (t) free-on-board (FOB) than the last available offers in February before the storm, to around $600/t depending on location. Most Oklahoma and U.S. Gulf plants had yet to issue any new offers by the end of the month.

In the short term, U.S. ammonia prices are expected to continue firming as tight supply continues to drive higher import and domestic prices.


Yara and Mosaic agreed on a Tampa contract price for March of $445 per metric ton (mt) cost-and-freight (CFR)-- up $115 on the $330 CFR agreed for February. This is the single largest monthly adjustment at Tampa since April 2014 and the highest settlement between Yara and Mosaic since September 2015.

Import sales of Middle Eastern ammonia to the U.S. started February at $380 CFR -- about $50/mt higher than the Tampa price for the month, which settled one week earlier. By the end of the month, Nutrien would purchase an Egyptian ammonia cargo for $520 CFR, to illustrate how quickly prices were moving higher in the Americas in February.

Meanwhile, Baltic Sea ammonia prices rose significantly from $282-$400/mt CFR, nearly twice as high as the first prices reported in 2021 and gaining well over $100/mt in February alone. FOB prices in the Black Sea rose to $350-$370/mt, also gaining about $100 over the month as ice blockages in the region complicated transportation and supply lines in February.

In the short term, we expect prices in the global ammonia market to remain firm on extremely tight supplies as we enter the spring planting season in the Northern Hemisphere, which will likely only drive demand higher from current conditions.



NOLA granular urea ended February at $346-$359/t FOB, at a tighter spread compared to $329-$365/t in the month beforehand as rumors of an India tender dissipated in February but short domestic supplies continued to support prices in the mid $300s/t.

River terminals saw muted activity ahead of spring as prompt demand remains slow and factories pulled offers while nitrogen plants across the country struggled to restart to full production capacity following the production interruptions mentioned previously. At the end of February, prices ranged from $380-$390/t FOB along open sections of the Mississippi, $50 higher from January and in line with the trend of overall rising NOLA barge prices.

Ex-factory urea was offered at $420/t at Port Neal in Iowa, $20 higher from the month prior. Oklahoma volumes were offered from plants in the eastern portion of the state at a similarly higher rate to Iowa at $400-$420/t.

In the short term, U.S. urea prices are poised to continue firming as spring demand is expected to pick up in the coming weeks and support will come from firming prices in the nitrogen complex as a whole, as well as many import volumes yet to arrive for the season. An India tender could push prices even higher, but no news surfaced regarding the timing of any new tenders by the end of the month.


At the end of February, tight supplies of global urea stocks culminated in rapid rises in freight rates as producers, traders and end-users all struggled to secure their respective transportation needs. Product originating in regions such as the Baltic Sea and the Arab Gulf were more affected by the freight rally, while the Black Sea and China saw more modest gains on account of robust domestic demand.

In North Africa, producers were unwilling to compromise on price as they remain comfortable, with Egyptian urea finishing the month $10/t higher compared to January, at $385-$390/t FOB. Brazilian urea in February, meanwhile, fell $5 from highs in the previous month to $385-$390/t CFR as the country took a pause on activity during the week of Carnival and observed some seasonal inactivity.

Despite rumors of an India tender in January causing world prices to shoot higher, no announcement has yet materialized with no expectations of a tender until at least mid-March. In the short term, we expect global urea prices to remain stable as the above-mentioned regions will likely remain in a pricing deadlock until the India tender comes.


February was an interesting month for UAN, given that about half to three-quarters of the month saw no UAN volumes on offer given the nitrogen production problems and resulting repairs on fertilizer plants. Producers including CF waited until March to re-offer volumes at prices $100/t over previous prices as they recalculated their bottom-line costs and as ammonia prices shot much higher when U.S. nitrogen was thrown into the winter chaos.

Fertecon assessed NOLA UAN at the end of February at $200/t FOB, $40-$50 higher from January but unchanged for much of the month on low liquidity as the barge market remained nearly nonexistent to end the month. However, new price targets were said to be around $300/t NOLA, before new business could be confirmed or offers were formally issued.

The U.S. East Coast price also rose to $300/mt CFR, $65-$75 higher from January as Russian exporters targeted higher prices given rising freight rates and tight supplies in the import region; prices could be expected to rise in the coming weeks given firmer sentiment on U.S. nitrogen as a whole.

Given increasing ammonia costs as a sharply higher Tampa settlement for March, U.S. UAN prices are expected to remain firm in the short term ahead of spring in-season demand once producers reissue offers and plants resume production.



U.S. phosphate prices faltered somewhat at New Orleans in February after the U.S. Department of Commerce released final subsidy rates for potential countervailing duties to be imposed on Moroccan and Russian origin phosphates, taking some of the guesswork out of margins for those sources should the duties go into effect in April.

NOLA DAP fell to $520-$525/t FOB, $20 lower per ton from January highs, while MAP was assessed at $560-$565, $10-$15 higher from January as supplies remain extremely tight inland and at NOLA.

Basis open Mississippi River terminals, DAP prices ended February at $570-$595/t FOB, $10-$15 higher month-over-month, while MAP reached $615-$620/t where available as few volumes could be found throughout the month, depending on location.

After the Feb. 9 hearing held by the International Trade Commission (ITC), most parties involved with the countervailing duties (CVD) investigation have presented final arguments and post-hearing briefs to the commissioners ahead of an expected final ruling on the matter next month. A meeting is set for March 11 for commissioners to vote on the case with an announcement to the public expected sometime later in the month.

In the short term, we expect phosphate prices to remain stable ahead of spring activity with prices expected to increase in the coming weeks given tight overall global supply.


Globally, it appeared a two-tier market emerged in February with phosphate producers opting to focus on supplying the Americas, Europe and Southeast Asia where they could achieve higher profits compared with the lower returns offered in India and Pakistan.

Brazil MAP prices rose to $600/mt CFR, $40 greater than in the beginning of the month, despite relatively low demand in the country over the month, leaving prices to follow in step with a much more bullish world market. In contrast, Indian DAP prices could not keep up with the firming seen in Brazil and rose only to $445-$446/mt CFR, around $100 less than prices achieved in China and Thailand.

India's fertilizer season was mostly inactive in January and kept prices there low, which left those regions that did see demand to compete for the little amount still available from producers. Overall, the short-term outlook on global phosphates is firm given strong spring demand having locked up most spring volumes and short supplies available in the meantime.


Both phosphate and potash fertilizers saw some signs of softening in February as prepay demand tapered off ahead of the start of the spring season. However, with North American producers having raised mine prices earlier in the month, offers are mostly stable in the U.S.

NOLA potash was assessed at $325/t FOB, up from $270-$275 in January as a $50 increase from Canadian and U.S. mine potash volumes raised replacement costs for retailers early in the month. Despite a lack of liquidity in the past week, values continue to move higher toward cost in markets where trade did occur.

In the U.S. interior, Mississippi River terminal tons along the lower portion reached $355-$365/t FOB at levels $50 higher from January prices, with most markets expected to move higher toward $375-plus before spring demand fully arrives.

In the short term, we expect U.S. potash prices to remain stable to firm with more price increases expected when spring application activity begins. An uncertain international supply situation is difficult to assess regarding the imminent impact on the U.S. market as major global producers were still negotiating supply contracts and fair market prices in February.


Editor's Note: This information was supplied courtesy of Fertecon, Agribusiness Intelligence, IHS Markit.