DTN Retail Fertilizer Trends

Fertilizer Prices Stuck in Neutral

Russ Quinn
By  Russ Quinn , DTN Staff Reporter
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Most other fertilizers are matching MAP's decline to December 2009 lows. That trend has prompted consolidation among retailers and global manufacturers. (DTN chart)

OMAHA (DTN) -- Retail fertilizer prices tracked by DTN for the second week of December 2016 continue to show fertilizer prices in no strong pattern. While prices have moved both higher and lower for some nutrients compared to a month ago, the movement is slight.

Half of the eight major fertilizers nudged higher in the past month although again none by any substantial amount. The four higher were potash with an average price of $320/ton, urea $333/ton, UAN28 $219/ton and UAN32 $257/ton.

The remaining half of fertilizers were lower, although all moves were within our margin of error. DAP averaged $433/ton, MAP $443/ton, 10-34-0 $444/ton and anhydrous $463/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.36/lb.N, anhydrous $0.28/lb.N, UAN28 $0.39/lb.N and UAN32 $0.40/lb.N.

The multi-year collapse in prices that has pushed many nutrients to seven-year or worse lows continues to prompt industry consolidation.

Vale SA, a Brazilian mining company, announced Monday it will sell most of its fertilizer business to U.S.-based The Mosaic Company for $2.5 billion, according to a Dow Jones report. The acquisition represents a key foothold in the one of the world's largest fertilizer markets for Mosaic and it should also help feed existing distribution networks in Brazil.

"If you want to grow in agriculture and fertilizers it has to be in Brazil," Floris Bielder, Mosaic's Brazil president, said.

For Vale, the deal brings an end the one-time hopes of capitalizing on global population growth by producing fertilizers. The company identified fertilizer ingredients as a strategically important business several years back, but it just never got off the ground, accounting for just 8% of Vale's overall revenue in the third quarter and posting negative earnings before interest and taxes.

Rumors have swirled for months that Mosaic could be in line to purchase the fertilizer business from Vale. Back in mid-November at The Fertilizer Institute (TFI) Fertilizer Outlook and Technology conference held in Fort Lauderdale, Florida, the sale of Brazilian fertilizer businesses was a topic of discussion.

Blake Hurtik, Argus FMB editor, said at the time that consolidation in the Brazilian fertilizer business could be on tap in the near future. He cited recent fertilizer company sales in the South American country and even had a graphic in his presentation with the Vale logo with a question mark after it.

There is no question any longer with this announcement on Monday.

Retail fertilizers are lower compared to a year earlier. All fertilizers are now double-digits lower.

Urea is now down 15%, both DAP and MAP are 19% less expensive and UAN28 is 21% less expensive. Potash, 10-34-0 and UAN32 are all three 22% lower while anhydrous is 24% lower compared to a year prior.

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 2010 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):

DRY
Date Range DAP MAP POTASH UREA
Dec 14-18 2015 532 544 410 392
Jan 11-15 2016 495 521 391 381
Feb 8-12 2016 479 499 378 369
Mar 7-11 2016 477 494 372 378
Apr 4-8 2016 480 504 369 387
May 2-6 2016 475 502 366 385
May 30-June 3 2016 473 499 363 375
June 27-July 1 2016 468 495 358 365
July 25-29 2016 459 492 356 356
Aug 22-26 2016 451 468 330 330
Sept 19-23 2016 443 453 319 323
Oct 17-21 2016 436 452 313 317
Nov 14-18 2016 436 445 315 327
Dec 12-16 2016 433 443 320 333
LIQUID
Date Range 10-34-0 ANHYD UAN28 UAN32
Dec 14-18 2015 571 612 279 331
Jan 11-15 2016 572 581 272 319
Feb 8-12 2016 569 551 261 303
Mar 7-11 2016 562 541 262 312
Apr 4-8 2016 561 586 272 315
May 2-6 2016 560 589 274 321
May 30-June 3 2016 559 579 268 313
June 27-July 1 2016 554 566 266 304
July 25-29 2016 543 545 257 304
Aug 22-26 2016 502 515 234 280
Sept 19-23 2016 470 494 225 271
Oct 17-21 2016 453 475 224 265
Nov 14-18 2016 445 466 219 256
Dec 12-16 2016 444 463 219 257

Russ Quinn can be reached at russ.quinn@dtn.com

Follow Russ Quinn on Twitter @RussQuinnDTN

(MZT/BAS)

Russ Quinn