Fertilizer Prices
Tim Hammerich
News Reporter
Fertilizer prices have taken a sharp upwards turn over the past several weeks, as global disruptions add even more pressure to the market. Josh Linville, Vice President of Fertilizer at StoneX, says this spike in prices is driven by a combination of global events and last-minute demand that’s putting a strain on the supply chain.
Linville… “ Your urea barges, before this thing happened, it was in the upper four hundreds. I want to say it was—I looked a couple days ago—it was $473, I think it was the last trade the day before the attacks began. Today the highest price we've seen trade: $695. So we're up over $200 a ton. And that's NOLA. The scary thing is that doesn't take into account the basis that we've started to see blow out because all the farmers have been waiting, rightfully so. I don't blame anybody for doing it, but they've been waiting and taking a ‘just in time’ demand model. The retailer, not having the farmer step up and buy it are saying, I'm going to wait. And that's fine. And a lot of times just in time demand can cause prices to fall. But in this case, I'm afraid what we're doing is we're getting backed into a corner and suddenly we're gonna start paying ‘just in time’ logistics. Very expensive. Not as timely as you might want them to be. And so we're talking about the price of urea jumping $200 a ton. The inland prices might jump up significantly more than that just because of paying that logistics to pay more trucks, to pay more rail, to pay more barge.”
Linville emphasized that a re-evaluation of the fertilizer supply chain is needed.
