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Don McGugan

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Don McGugan
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Review of Fertilizer Prices - March 2021

Review of Fertilizer Prices – March 2021


Fertilizer prices have hit their seasonal highs and are expected to decline into year end, although prices will most likely settle at much higher levels given the elevated prices for cash crops.

Biggest overall driver

One of the biggest surprises was the United States Planting intentions which indicated that there will be 4 to 5 million acres less of corn and soybeans planted.[1]  This could indicate less fertilizer usage and possibly lower demand.

In nitrogen, it is likely we will see declines as in urea, there is an estimated 4-5%capacity growth and an estimated 2% demand growth.[2]

In potash, there could be pricing increases as demand increases and capacity ramp up is slowing.[3]  For all of the fertilizers highlighted here, this fertilizer is most likely the one to see a price increase in the next quarter.

In phosphate, the largest issue it the phosphate import duties on Russian and Moroccan producers.  This issue has been resolved (as import duties have been instituted) and gradually production from other areas of the World will flow into North America and reduce phosphate pricing.[4]  This should substantially decrease the cost of phosphate in the later part of this year.

In closing, there should be lower fertilizer prices seen in the next quarter.

Product Location Quantity Average price in 2020 Q1/21 Price Q2/21 Estimate Q3/21 Estimate Q4/21 Estimate 2021 full year Estimate Q1/22 Estimate 2022 full year Estimate
Ammonia Tampa (cfr) Mt 233 348 498 398 325 393 335 340
UAN New Orleans (cfr) ston 129 208 208 160 160 184 180 165
Urea Midwest (fob) ston 272 379 350 310 320 340 360 328
DAP Midwest (fob) ston 348 529 490 420 385 456 400 398
Potash Midwest (fob) ston 255 338 330 300 300 317 300 290
[1] Prospective Plantings – March 31, 2021 -
[2] BMO Capital Markets – Joel Jackson – April 8, 2021
[3] BMO Capital Markets – Joel Jackson – April 8, 2021
[4] BMO Capital Markets – Joel Jackson – April 8, 2021