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Some, not all nitrogen prices are falling

A fertilizer market expert says some forms of nitrogen are getting less expensive, not all.

Josh Linville with StoneX tells Brownfield he’s seeing the manufacturing side lower prices, which allows the retail side to do the same, but there’s one form of nitrogen that hasn’t fallen much. “We’ve already been seeing the urea price fall. That’s something that’s been in play for quite a while, since the beginning of December. We are now finally starting to see the wrinkle in the sheets if you will, on the UAN market. Those prices are starting to come off. Now, the one we’re not seeing is anhydrous.”

Linville says the retailers and farmers are asking why anhydrous prices haven’t followed suit. “It’s a lot of pressure on the marketplace to get this sucker lowered down. It’s just the manufacturers don’t want to do it today.”

Linville says part of the problem is there are not many manufacturers for anhydrous. “When you look at the open market when it comes down to it, there’s only two major (producers) that control a majority. There’s a third one, but they’re much, much smaller in comparison. So, you don’t have much competition from that standpoint.”

When asked if farmers should consider locking in their nitrogen now, he says, “On the urea and UAN, I am saying yes.” And, that’s because a lot of the demand side is holding off, and Linville is concerned that if everyone waits until the last minute, retailers might not be able to move enough product fast enough to meet the sudden demand with spring just around the corner.