How Retailers Can React to Fertilizer Supplies and Springtime Snags

With the potential shift away from anhydrous Jim Hedrick says retailers need to start communicating with farmers now. ( Margy Eckelkamp )

In 2019, spring fertilizer applications have had to deal with a hangover of leftover acres from post-harvest, logistical issues, and non-cooperative weather patterns. With each round of rain, more acres may be shifting from anhydrous application to other sources of nitrogen, because so far farmers aren’t shifting those acres away from corn.

Jim Hedrick, with Horizon Ag Consulting tracks the fertilizer market globally and works with farmers from Iowa to Ohio, points out ammonia prices this winter were $140 to $180 higher than last fall. That increase was abnormally higher than normal and has increased the interest in alternative forms.

With the potential shift away from anhydrous Hedrick says retailers need to start communicating with farmers now.

“Farmers need a retailer who can help them be flexible with their nutrient source—it’s critical,” he says. “Farmers may be thinking they’ll apply ammonia today, but one more rain and they’ll switch.”

As more farmers are split applying nitrogen, Hedrick says the change in practices have encouraged farmers and retailers to work closer together to be responsive to the conditions and growing season.

“It used to be that once corn was knee-high, our options ran out. But today we have the equipment and tools to feed our corn later in the season and have increased our options,” he says.

Hedrick believes the Midwest to be well-stocked with urea and UAN, but as retailers look ahead to replacing inventories for sidedress and then refilling in the summer, he says they should be mindful that globally there’s an oversupply of phosphates and nitrogen.

“For the past two months the fertilizer price trends have been bearish. Replacement costs of phosphates and nitrogen will be lower, but so far potash is an exception,” he says.