December 29, 2008
ASA weekly: Wholesale US fertiliser prices drop
After climbing continuously for six years, US wholesale fertiliser prices are seeing a downturn due to drops in commodity prices and natural gas, the primary ingredient to make fertilisers.
That is according to a report by the American Farm Bureau Federation (AFBF).
Wholesale prices for fertiliser is plummeting with retail prices yet to fall because soy, corn and other commodities prices have fallen 50 percent or more from summer highs.
According to AFBF Senior Economist Terry Francl, the wholesale fertiliser price drop began about two months ago, after the time farmers applied fall fertiliser to their crops.
According to the report, wholesale prices for anhydrous ammonia in the Corn Belt have declined from the US$1,000 per-tonne-plus range to the US$500 range. Urea has dropped from the mid-US$800 range to the mid-US$300 range. Diammonium phosphate has declined from US$1,100 to US$600 per tonne. The decline in potash prices has been less significant, dropping from a little more than US$900 per tonne to slightly over US$800.
Francl said besides a fall in commodities prices, the drop in natural gas prices also accounted for the decline in wholesale fertiliser prices. Natural gas prices have declined from more than US$11 per million BTUs (1,000 cubic feet) to around $6 per million BTUs. Natural gas takes up 80 percent to 90 percent of the input cost of manufacturing anhydrous ammonia.
Francl said fertiliser dealers with large, high-priced inventories piling in the warehouse are in for a difficult time as farmers had indicated that they were planting less fertiliser-intensive crops, such as corn and cotton which do not use
nitrogen at all to avoid adding nitrogen to the ground.
U.S. & South America Soybean/Products Balance
？€€
United States
Argentina
Brazil
Actual
Estimate
Proj.
Actual
Estimate
Proj.
Actual
Estimate
Proj.
2006/07
2007/08
2008/09
2006/07
2007/08
2008/09
2006/07
2007/08
2008/09
Soybeans
thousand tonnes
Carryin
12,229
15,617
5,580
334
1,876
945
2,252
3,110
3,830
Production
86,770
72,824
79,486
48,800
46,200
50,500
59,000
61,000
59,000
Imports
246
269
191
2,336
3,025
2,700
108
100
150
Crush
49,198
49,024
46,675
35,962
35,180
36,700
31,511
31,955
31,500
Exports
30,428
31,598
28,576
12,132
13,400
14,900
23,805
25,450
25,000
Other
4,002
2,508
4,422
1,500
1,576
1,600
2,934
2,975
3,025
Usage
83,628
83,130
79,673
49,594
50,156
53,200
58,250
60,380
59,525
Carryout
15,617
5,580
5,584
1,876
945
945
3,110
3,830
3,455
Soymeal
thousand tonnes
Carryin
285
314
267
2,003
1,144
1,200
863
1,563
1,878
Production
39,058
38,322
36,959
27,856
27,607
28,700
24,420
24,760
24,410
Domestic use
31,184
30,078
29,484
619
634
660
11,520
12,180
12,600
Net Exports
7,845
8,291
7,470
28,096
26,917
28,013
12,200
12,265
12,075
Usage
39,029
38,369
36,954
28,715
27,551
28,673
23,720
24,445
24,675
Carryout
314
267
272
1,144
1,200
1,227
1,563
1,878
1,613
Soybean oil
thousand tonnes
Carryin
1,365
1,399
1,126
487
310
301
300
341
406
Production
9,294
9,329
8,868
6,917
6,709
7,017
6,050
6,130
6,040
Domestic use
8,420
8,313
8,165
580
1,045
1,167
3,550
3,895
3,998
Net exports
840
1,289
907
6,514
5,673
5,800
2,459
2,170
2,050
Usage
9,260
9,602
9,072
7,094
6,718
6,967
6,009
6,065
6,048
Carryout
1,399
1,126
922
310
301
351
341
406
398
USDA Export Sales (tmt) - Week of 18 December 2008
Country
Commodity
New Sales
Accum. Exports
Country
Commodity
New Sales
Accum. Exports
Canada
Soy
7.80
82.80
Japan
Soymeal
9.90
34.30
China
Soy
374.30
7623.80
Mexico
Soymeal
33.30
361.00
Colombia
Soy
12.90
50.40
Philippines
Soymeal
3.80
46.40
Egypt
Soy
60.00
142.10
Turkey
Soymeal
16.60
38.40
Indonesia
Soy
114.60
312.60
Venezuela
Soymeal
23.00
152.50
Korea, Rep.
Soy
58.30
123.80
Canada
Soyoil
2.20
8.20
Mexico
Soy
12.40
856.80
Nicaragua
Soyoil
0.60
7.20
Netherlands
Soy
129.80
558.90
Spain
Soy
11.30
213.80
Taiwan
Soy
59.60
640.50
Export Sales Totals (tmt)
Canada
Soymeal
16.20
234.20
Commodity
Outstanding Sales
Accum. Exports
New Sales
Colombia
Soymeal
7.70
38.80
Soybeans
7,260.90
125,580.50
584.80
Dom. Rep.
Soymeal
15.70
74.40
Soymeal
1,409.70
1,649.00
145.70
Guatemala
Soymeal
12.00
64.40
Soyoil
107.80
106.20
5.50
