High fertilizer prices likely to climb more

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MarketsFarm — Expect fertilizer prices to resume increasing, despite having fallen back recently. Prices began their sharp rise around the middle of December and beginning of January.

“They will go higher as demand goes up at seeding time,” Mike Jubinville of MarketsFarm Pro in Winnipeg said.

Jubinville reported urea prices have jumped $100 per tonne since the beginning of 2021 (all figures US$). Diammonium phosphate prices at the Port of New Orleans increased by $145/tonne around Jan. 1.

Any farmers still needing to purchase nitrogen are looking at their fertilizer costs increasing 15 to 20 per cent compared to two months ago, he added.

Don Kitson of International Raw Materials at Fort Saskatchewan, Alta. said higher prices for corn, canola, wheat, and other crops have seen fertilizer following suit.

“It causes farmers to buy earlier,” he said, noting prices for potash and ammonia have risen as well over the same time frame.

Jubinville said those higher crop prices are leading farmers to buy more fertilizer to “maximize crop potential.”

China has had an effect on the market as well, by consuming more and limiting global exports to conserve its domestic supply, Jubinville and Kitson agreed.

Added to that have been the import duties the U.S. slapped on phosphate coming in from Morocco and Russia, which further tightened supplies in North America, Kitson said.

Clare Kinlin of MacEwen Agricentre at Marville, Ont. agreed demand has been the main driver behind fertilizer going up, but he cited another factor — consolidation of the fertilizer industry in Canada.

“As an independent ag retailer, there are really only three people we can buy from. They haven’t been able to give you a price for the last six weeks,” Kinlin said.

“They don’t have access to it at this time because we’re along the St. Lawrence Seaway and it’s too cold for the boats to run.”

— Glen Hallick reports for MarketsFarm from Winnipeg.

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Glen Hallick - MarketsFarm

Glen Hallick writes for MarketsFarm specializing in grain and commodity market reporting.

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