Fertilizer prices could drop by late summer, 2013 price run-up expected to be lower

Tipping point reached for nitrogen Price ramped up in response to expectations of largest U.S. corn crop since 1937

A leading fertilizer industry analyst believes nitrogen prices have reached a tipping point and will soon be falling.

“By August, we expect a pretty good trough to develop,” said David Asbridge, president of NPK Fertilizer Advisory Service.

Prices began ramping up in March in response to what is expected to be the largest U.S. corn crop since 1937.

Shippers and handlers of fertilizer products were caught flat-footed by the surprisingly hasty start to the 2012-13 crop year. Growers were out in their fields a full month before normal.

“We started so early that we just did not have the supply here that we needed at the time we needed it,” said Asbridge.

U.S. farmers import 70 percent of their urea needs. Boats were lined up with product at the ports this spring but couldn’t unload in time to meet the early season demand, causing a temporary supply shortage that pressured prices higher.

Asbridge is confident they have reached their peak.

“It wouldn’t surprise me at all in certain parts of North America to see the urea price drop $200 per tonne here in the next two months,” he said.

He is advising subscribers to the NPK Insider newsletter to consider holding off until late summer to buy their fall fertilizer needs.

They may even want to consider buying some product for next spring at that time.

Asbridge anticipates a normal seasonal increase in nitrogen fertilizer prices this fall, followed by a dip during the winter doldrums and then the usual hike in the peak buying season next spring.

However, he doesn’t expect the run-up in the spring of 2013 to be as dramatic as this spring.

“Barring some unforeseen catastrophe somewhere, it shouldn’t be anywhere near like it was this year,” said Asbridge.



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