Doane Advisory Services  |   April 4, 2012 resize text

click image to zoom The spring fertilizer application season is heating up and the demand is pulling fertilizer prices higher. DTN surveys retailers weekly to get a fix on fertilizer prices. As of last week the price for urea was reported at $628 per ton, compared to $574 per ton in late February and $493 per ton in March of 2011. The urea price in March of 2010 stood at $416 per ton.

Prices for potash are also up significantly this month. The retail price for a ton of potash was up $50 per ton compared to the price in February, to $695 per ton. This is an increase of about $100 per ton compared to the price last year at this time and is nearly $200 per ton higher than it was in 2010. Potash prices are still well below the record high levels recorded back in 2009 though.

DAP prices declined a little from February to March. The price drop was pretty small, at $5 per ton, but DAP prices have been declining steadily since November. DAP prices last November stood at $714 per ton, compared to $645 per ton last week. In March of 2011 DAP prices were reported to be $680 per ton.

Cash corn prices have rebounded recently, but they are currently below the year-ago level. With fertilizer prices generally higher and corn prices lower, the fertilizer-to-corn price ratio has increased. That makes fertilizer use a little less attractive this year than at the same time in 2011. But the fertilizer-to-corn price ratio has declined compared to the fall application season. However, if we base the comparison of retail fertilizer prices to new crop futures prices, the urea-to-corn price ratio now is higher than it was in the four previous fertilizer application periods.

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