OMAHA (DTN) -- Retail fertilizer prices tracked by DTN for the second week of July 2016 show prices are lower but not by significant amounts. However, DTN's last five weekly surveys have all reported price reductions.
In the latest retail survey, all eight of the major fertilizers dropped slightly in price compared to the previous month. DAP averaged $467/ton, MAP $496/ton, potash $358/ton and urea at $360/ton. 10-34-0 was at $538/ton, anhydrous $547/ton, UAN28 $266/ton and $306/ton.
On a price per pound of nitrogen basis, the average urea price was at $0.39/lb.N, anhydrous $0.33/lb.N, UAN28 $0.48/lb.N and UAN32 $0.48/lb.N.
In a July 11 blog post, David Widmar, agricultural economist at Purdue University, notes that except for fertilizer, variable crop production costs for corn have been slow to move. He previously examined if fixed costs were seeing adjustments.
Widmar pointed out that the average total cost of corn production in 2015 was $677 per acre or about $13 per less than in 2014, using data from USDA. This represents a mere 2% decline in total costs.
"Among variable costs, fertilizer was down $11 per acre in 2015," Widmar wrote. "Overall, fertilizer was a significant driver in lower corn production costs in 2015 as it accounted for half of the total variable cost reduction."
Widmar points out that other variable costs, such as seed and ag chemicals, have changed very little in 2015. Both were within $1 per acre of 2014 levels.
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Data from Purdue corn budgets from 2014 to 2016 also document the fall in retail fertilizer costs. Fertilizer expense alone fell $21 per acre by 2016 and accounted for two thirds of the total variable expensive reductions over this period. The drop in fertilizer prices has been a critical component to adjustments to lower costs of production, he wrote.
Looking ahead to the 2017 growing season, Widmar believes it is difficult to imagine that fertilizer prices will continue to provide such a large cost savings.
"The combination of strong corn fertilizer demand in 2016 and stabilizing energy prices could set up the possibility of higher fertilizer prices in 2017," he wrote.
(To read Widmar's blog post, go to http://ageconomists.com/…).
DTN surveys show retail fertilizers remain significantly less expensive compared to a year earlier. All fertilizers are now double digits lower.
UAN32 is 15% lower, both MAP and 10-34-0 are 16% lower while both DAP and UAN28 are 18% less expensive. Anhydrous is 21% lower, urea is 23% less expensive and potash is 27% less expensive compared to last year at this time.
DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.
DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.
Retail fertilizer charts dating back to November 2008 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.
DTN's average of retail fertilizer prices from a month earlier ($ per ton):
|July 13-17 2015||569||593||488||470|
|Aug 10-14 2015||568||591||479||457|
|Sep 7-11 2015||563||580||467||433|
|Oct 5-9 2015||548||564||446||418|
|Nov 2-6 2015||546||560||430||405|
|Nov 30-Dec 4 2015||541||559||421||400|
|Dec 28-Jan 1 2016||494||531||398||383|
|Jan 25-29 2016||495||515||391||380|
|Feb 22-26 2016||477||492||373||371|
|Mar 21-25 2016||475||501||371||390|
|Apr 18-22 2016||477||502||366||388|
|May 16-20 2016||476||501||365||384|
|June 13-17 2016||469||496||359||367|
|July 11-15 2016||467||496||358||360|
|July 13-17 2015||639||691||323||359|
|Aug 10-14 2015||631||677||315||356|
|Sep 7-11 2015||594||656||301||346|
|Oct 5-9 2015||584||639||294||338|
|Nov 2-6 2015||583||633||291||332|
|Nov 30-Dec 4 2015||578||627||286||332|
|Dec 28-Jan 1 2016||570||590||273||317|
|Jan 25-29 2016||571||569||271||317|
|Feb 22-26 2016||566||536||260||309|
|Mar 21-25 2016||561||569||276||312|
|Apr 18-22 2016||561||588||274||322|
|May 16-20 2016||558||588||274||321|
|June 13-17 2016||555||566||266||305|
|July 11-15 2016||538||547||266||306|
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