CFQ: 2013 Wasn’t the Best Year for Fertilizer Sales

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

Fertilizer year 2013 turned out to be another unusual year for the fertilizer markets in what has turned out to be a string of unusual years. While we’ve had two good fall fertilizer application years in a row, the spring season the last two years has been anything but “normal.” In 2012, warm weather and ideal soil and moisture conditions across most of the Corn Belt led to one of the earliest planting seasons on record. Unfortunately, the demand for fertilizer hit before the supply was in place. That led to sharp increase in prices and left both wholesalers and retailers scrambling for tons.

This year was almost the exact opposite with one of the slowest planting dates on record. The net impact was a disastrous spring season, particularly for P and K. Although farmers managed to get most of their nitrogen down, that certainly wasn’t the case for P and K with many farmers opting to skip pre-plant fertilizer applications in order to get the crop in the ground. Ammonia was also hit hard with a significant portion of the spring planting tons being shifted over to urea and UAN.

So what’s going to happen in FY14? That’s a good question, particularly considering that forecasts, by necessity, are made under the assumption of “average” or “normal” conditions. Given that caveat, here’s our assessment of the fall season.

Demand - For FY14, this should be another good fall season. However, given how late this year’s corn and bean crops are going to get harvested, the fall application window could be shortened. This will be particularly true for ammonia if permafrost sets in early. The other key factor is going to be the size of this year’s crop. Obviously, a larger than expected corn crop would mean lower corn prices and lower acreage for 2014 while a smaller than expected crop would translate into higher prices and higher acreage. All factors considered and assuming a “normal” weather pattern, we expect total nitrogen to remain at close to the FY13 estimated level. However, ammonia is expected to rebound from this year’s poor spring and regain market share from both urea and UAN. Phosphate should rebound and increase by about 6 percent while potash usage increases about 7 percent.


The Gulf urea market has dropped nearly $100 per ton since early March, but appears to have finally hit bottom. The recent Pakistani and Indian tenders have given some life to the market as these sales will absorb some of the recent surplus at the world level.

Also, reduced supplies out of Egypt due to interruptions in natural gas supplies, combined with production outages in the Ukraine, have also helped take some of the surplus out of the world trade balance. The other factor adding some support to the market is the slower than expected discharge of export tons coming out of China.

Going forward, the outlook remains fundamentally soft through the end of the calendar year with prices forecast to trade mostly sideways through the third quarter, then pick up a little strength as fertilizer begins to move in the fourth quarter. There does not seem to be much upside to this market, however, due to the import situation. Import volumes during Q1 and Q2 of FY14 are forecast to be down from last year’s record volume but remain well above historic averages.


UAN movement seems to have been relatively strong this spring as it became the product of choice for much of the side-dressing that had to be done due to the late, wet spring season. It has become the largest nitrogen product over the past several years for several very good reasons, and being a good side-dress product is one of them. Despite the product movement, however, prices have continued to drift lower as the season ends and the domestic market has become a bit oversupplied.

We expect prices to trade mostly sideways near-term followed by some minor appreciation going into the fourth quarter. However, there appears to be slightly more downside than upside. One key swing factor will be imports. A weakening offshore market later this summer could lead to higher than expected import levels. The forecast also assumes that U.S. production levels will remain close to current levels. This assumes that additional supply from the PCS Geismar facility will be offset by either lower production at other facilities and/or higher U.S. export volumes.


The Midwest ammonia market has stabilized following a precipitous decline from levels at the first of the year. The lack of activity is not too surprising given the time of year as well as buyer uncertainty over the fall season. As discussed earlier, where this year’s corn crop is going to end up is anybody’s guess. Concern over a shortened fall application season is also weighing into the equation.

Going forward, where the market actually ends up is going to depend on the weather this summer and fall. While we continue to expect a reasonably strong fall, a shortened application season, combined with the high carryover from last spring, will likely cut into producer shipments and help keep a lid on any additional price increases.


The phosphate market has been on a slow decline since last summer, despite good product movement last fall. The biggest factors have been the wet weather here in the U.S., causing an inventory build-up in the U.S., and extremely slow exports to the largest importer, India. The value of the rupee has declined sharply versus the dollar, putting pressure on margins in India as well as causing prices to be higher than expected to the end user. The Indian subsidy scheme has recently been adjusted to allow for higher retail prices, so imports should begin to pick up after one of the slowest quarters in history.

The outlook for the market is to remain soft near-term with some room for price appreciation as we move into the fall season. This outlook, however, is still highly uncertain and, again, is going to depend to a large extent on this year’s crops and the export outlook. Although our baseline forecast is predicated on a rebound in exports into both the Latin American and Asian markets, India remains a question mark, especially if the value of the rupee continues to slide.



The spring weather in much of the northern hemisphere conspired to keep farmers out of the field and limited how much potash could be applied. Although there’s no hard data, a substantial volume of product is reported to still be in warehouses following what turned out to be a disastrous spring season. This factor, combined with the Indian import situation mentioned above, has kept total potash inventories relatively high. In addition, the expansion of production capacity around the world has kept the market oversupplied.

The international market also remains relatively weak and oversupplied. According to industry sources, inventory remains high in China with Chinese buyers not expected to come back into the market for second half contracts until August at the earliest. The situation in India is not much better.

Going forward, the Midwest wholesale market is expected to trade sideways to slightly lower near-term with very little price appreciation going into the fall application season.

Although the market could move somewhat lower than projected, the recently announced production cutbacks are expected to keep producer inventory in check and prevent any significant deterioration in prices. However, there appears to be little upside in this market given the current surplus in the world markets.

You can find further and more timely information at with a 30-day free trial of the NPK Insider.

Prev 1 2 3 Next All

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (0) Leave a comment 

e-Mail (required)


characters left

Aluminum Grain Trailers

Maurer Manufacturing offers a complete line of high quality aluminum grain trailers. Manufactured in Spencer, Iowa, Maurer aluminum grain trailers ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form