Fertilizer Prices Are Dropping
Wow! Fertilizer prices are dropping. Low cost gas is plentiful due to domestic increases in production. Many new fertilizer plants have been announced! What does this mean to growers?
I have been on the mining, manufacturing and sales side of fertilizer for over 20 years. But I am not an agronomist, so I look at processing and cost trends. These are my opinions and observations.
The past 4-5 years have been good in agriculture, in both North America and globally. Why??
- There are solid prices for all the top 10 grain and food stuffs. Not just corn, wheat and soybeans, but rice, beans, potatoes, cassava, sorghum, bananas and plantains.
- The grower has made good money the past 4-5 years and has money to buy inputs in the foreseeable future.
- World population is climbing, and arable land is shrinking. That means every cultivated acre has to yield more.
What are the Worries for the Grower?
- The costs of most inputs are increasing. A grower’s budget includes owned or rented land costs, seed, fertilizer, water, labor, energy, crop protection chemicals, specialty products and information/risk management. Over the past 4 years or so, nearly all of these were increasing in cost.
- Again, at good grain prices, a grower can make good money on nearly all crops by using the recommended inputs. These are expensive but clearly produce yield increases.
- Additionally, the farmer should investigate whether the prudent use of calcium sulfate can improve soil health and increase the effectiveness of traditional fertilizers.
A smart grower can invest in good crop inputs, including soil, crop and yield enhancements, and make a solid return. It’s a great time to be in AG!
Author: Pat Avery
Pat Avery – Senior Advisor to EcoGEM. Mr. Avery has more than 25 years of experience in industrial business and agriculture. For 15 years, he held progressive roles in petroleum refining and pipeline/terminal operations at ARCO and Santa Fe Pacific Pipelines. He led mining and manufacturing of phosphate, potash and other industrial chemicals at over 20 complex facilities. He served as SVP at JR Simplot and President of Intrepid Potash. Most recently he was CEO and board member for Prospect Global Resources Inc. and the American West Potash asset. Mr. Avery has served on several business and non-profit boards.