India has shocked the global
#urea
world by cutting their purchase in half, down from 724KMT to a now 340KMT. World is left scrambling and shows why it is so important to wait for the final results before building a market POV.
Chinese gov't has effectively banned
#phosphate
exports thru June '22
China accounts for almost 30% of world trade. This is bad for global phosphate prices and even worse for those highly dependent on those tons (i.e. Australia)
Watch for
#urea
similar action
#blackswanevent
The days of "just being a farmer" are over.
Most farming operations use more cash flow, take more risk, and put in more work than most companies around the world.
You are the CEO of your operation. Pays to have that mindset.
Again, I am no brilliant military strategist but...
...we finally decided to shoot down the balloon after it drifted over the entirety of the U.S.? If it was transmitting info, wouldn't it had already done so?
Does this whole thing just seem odd to anyone else?
I'm going to close the week with this statement:
When you go to buy your
#fertilizer
, BE NICE TO YOUR SUPPLIER/RETAILER/COOP. They DID NOT do this. They would rather sell you cheap inputs.
You can be pissed but do not misdirect it at the group trying to help you.
Well, after a lots of chats with the Mrs, we are going to try and buy that 80 acres I mentioned a couple weeks back.
My aunt also wants it so have to outbid her.
Dad is willing to help to get me started.
Honestly scared to death but would love to put my advice into practice.
OK, I want a post do-over:
City folk: "farmers are just a bunch of dumb hicks living in flyover states that have no idea what technology is."
Farmers planting the 2023 crop: "this is my view every day..."
There, that feels better!
In Kansas City, the current temp is -3F and with the wind, the wind chill is -27F. News agencies continue to warn about the dangerous conditions of this artic blast. Schools and businesses are shutting as a result.
Northern Plains and Canadian farmers call this a Thursday.
This is where solar should be placed. Every parking lot. Every city building. Every ground between the roads on the interstate systems.
NOT ON FARMGROUND.
I keep trying to get away and it keeps pulling me back!
NOLA
#urea
physical is puking this morning with Feb barges trading as low as $620.
Urea is now the cheapest form of N in North America.
Urea - $0.67/lb of actual N right now
UAN - $0.90
NH3 - $0.73
I updated the
#fertilizer
/
#corn
ratio charts.
- 12 months ago it cost 55 bushels of corn for 1 ton of
#urea
. Same ton today, 135 bushels.
-
#UAN
- 30 bushels a year ago vs 97 today
-
#DAP
- 90 bushels a year ago vs 130 today
-
#potash
- 50 bushels a year ago vs 130 today
Sorry
Remember that your biggest danger is not low grain values, high fertilizer values, land prices, etc.
Your biggest danger sits 6" above your shoulders. Do not let emotion drive your decision making for your farm.
If you are like me, you have never made a good decision angry...
I want to say thank you to everyone that follows me.
While at dinner with a great group of co-workers in NOLA, my count topped 20,000. Not big for most, but for me I think it is pretty cool!
Thank you and we will keep sharing the fert news!
Dad brag moment
The oldest made Eagle Scout this evening
He started late into the program. He had to work on progressing while living in MO/KS/FL. He had to work on progressing while we were moving to Australia...and then not.
Went thru a lot to get here. Big accomplishment!
I realized that I hit 10k followers today and honestly, it made me a bit sad.
Only because I've been followed due to my almost daily bad news on fertilizer markets.
Hoping to hit the 20k mark more due to good news.
Thanks everyone for the follow. I really appreciate it.
I just saw a video where a Switzerland based company is researching putting solar panels between their railroad tracks.
Why are these methods not used rather than taking productive farmland?
Use railways. Use sides of interstate systems. Use warehouse buildings/parking lots
Before signing off for Christmas, I wanted to take a moment to say thank you.
Last year at this time, I had less than 2K followers. Today, I reached 15K. A lot for me.
I hope the fertilizer information, which hasn't always been pleasant, has helped people in their decision.
It's that special time of year where I hate gas pump prompts.
No i do not want to sign up for rewards.
No i do not want a car wash.
It is 15 degrees. I want to fill my tank and not freeze to death.
There should be a temp where all the prompts disappear.
So, we have a suspected spy balloon going over the north U.S and our strategic decision is to let it.
I cannot claim to be a brilliant military strategist...but that doesn't seem like the right answer.
With NOLA
#urea
trading $690, let's update the ratio:
Dec '23 corn - $6.135
Urea - $690
112.5 bushels of corn per 1 ton of urea
Chart below is every year since 2005. Doesn't get much higher than where we are...
To get to a "normal" 65 ratio...
#corn
needs to be $10.61...
Oh, I don't know, maybe let farmers around the world do what they do best.
Stop allowing a person in a city who has never raised a crop to dictate farming practices.
Stop allowing solar fields to gobble up prime farmland.
Farmers do pretty well when allowed to do so.
I'm laying on the couch thinking about what tomorrow brings.
- Dec '22 corn almost $6.25.
- Might lose Russian NPK exports
- Might lose Russian nat gas to europe
- Might continue to lose Chinese exports due to "sympathy"
Fuck...
So for global nitrogen:
- Europe production low due to high nat gas price
- China stopped exports
- Russia stopping exports
- India well behind normal inventory levels
- A LOT of demand coming Q1
...sigh...
If you go to your supplies/retailer for
#fertilizer
needs and they say they are struggling to get a price
THEY ARE NOT LYING TO YOU
These markets are severely disrupted right now. They are doing all they can.
This is turning into the nightmare scenario we always feared....
News is being shared that the Chinese government has banned fresh shipments of
#fertilizer
to export ports.
No shipment to ports, no way to export fertilizer from China.
China is a MAJOR producer of fert and a MAJOR exporter.
This is bullish, in case that wasn't clear...
I haven't mentioned this but I have been building an inground pool this year. Trying to save some money by doing it myself. Finally got power to the pump and lights.
All, PLEASE look at your blueprints/plans from different angles because you might miss something!!!
Some days unexpectedly knock you on your butt.
Was finishing the PP for the Dec farmer newsletter when I got the call that my grandmother passed away in her sleep last night. Not the news I was expecting to hear.
Life is short. Enjoy the time you have.
Me "I can't believe farmers would start planting just because their neighbor does"
Also me "Damn, is someone mowing? Should I go mow?"
It's real everyone. It really is.
If you lock up/apply your fertilizer, consider selling grain against it.
While today sucks, if you buy your fert and corn price goes to hell...that will be worse.
$34,800/acre...sold
If this farm went continuous corn, yielded 250 bushels/acre every year, sold every bushel at $5 and HAD NO EXPENSES...
It would still take nearly 30 years to break even.
Buckle up because it is soap box time:
With NOLA
#urea
tumbling in the last week or two, I am seeing a lot of comments like "I'm going to show my retailer now". That comment makes it seem as though they knew what was coming.
I'll cut to the chase, THEY HAD NO IDEA.
Closing in on
#fertilizer
price records:
NOLA
#urea
all-time high - $835
Current urea - $710
NOLA
#UAN
all-time high - $556
Current UAN - $500 - $535
NOLA
#DAP
all-time high - $1,100
Current DAP - $695
Midwest
#NH3
all-time high - $1,150
Current Midwest NH3 - $900 - $1,000
Barge lines are struggling to ship due to low waters.
Railway workers have rejected an agreement, raising the possibility of a strike again.
Not nearly enough trucks to transport everything.
If you are the praying type, now is the time. This could get really bad.
I knew it was going to be bad...didn't think it would be this bad:
April Arab Gulf
#urea
paper trades $195 HIGHER than yesterday settlement
Physical NOLA
#urea
physical trading $160 HIGHER than yesterday physical trade.
Wow....
#Nitrogen
#fertilizer
prices down again today as a lack of demand and continued world production push the global S&D even more out of line.
World is looking for demand that refuses to step forward which is keeping the pressure on.
#agtwitter
, the great NOLA
#urea
sell off continues with 2nd half June shipment trading at $475.
The last time we saw these values was August '21.
We topped at $935 March '22.
That is one hell of a cycle.
Dear literally ever hotel in the world
It makes sense to have a readily available plug in on the night stand next to the bed. It is a pain to pull the night stand away to access the nasty wall plugin.
Sincerely
Literally anyone who has a cell phone and has stayed in a hotel
If we had to get back to "normal"
#corn
/
#fertilizer
ratio values with corn price doing all the work, that would result in:
Urea @ $700 NOLA = $12.72 corn price
UAN @ $500 NOLA = $14.29 corn price
DAP @ $685 NOLA = $8.06 corn price
Potash @ $680 NOLA = $11.33 corn price
By the close of business, NOLA
#urea
physical prices had traded down to $410.
The highest price I saw was $935 in late March which means prices are 44% of what they were.
Still no major price movements for
#uan
or
#nh3
...yet.
If you feel like
#fertilizer
is costing more of your operation than years past, that's because it is.
Updated
#corn
/fertilizer ratio charts
Normally costs 55-60 bushels for 1 ton
#urea
- now costs 135
Normally costs 60 bushels for 1 ton
#potash
- now 130
Sorry...
Sept 1, 2022
Dec '22 corn - $6.58
NOLA urea - $695
Ratio - 106 bushels per ton of urea
Today
Dec '22 corn - $6.28
NOLA Urea - $500
Ratio - 79 bushels per ton of urea
Spending 27 less bushels today for the same urea ton.
Higher grain prices is not always the best value.
I will never understand people who stand right next to the luggage turnstil. People, back up 4 - 6 feet. I guarantee you will have time to step up and grab your bag. It isn't going that fast.
Thoughts from a tired/cranky josh.
And now a physical NOLA
#urea
bare has traded at $575!!!
Physical barges were $785 at Christmas!!!
Rest of the world not showing anything close to these declines...yet. If they hold, this will be a short term dip. If they falter...watch out.
Many of you may not know this about me, but I can see the future sometimes.
My current prediction is that by this time next week, Twitter will be full of "I can't believe we planted that many corn acres that quickly" comments!!!
Wanted to spread a little
#fertilizer
cheer before the holidays. NOLA values have dropped decently from their March/April '22 high's:
Urea - down 66%
UAN - down 62%
NH3 - down 57% (using spring prepay)
DAP - down 42.5%
Potash - down 61%
Corn is also down, but not as much.
If you apply
#nh3
, this may be the best advice you will ever hear:
DO NOT LET THAT TRACTOR SEAT GET COLD THIS FALL
NH3 is stupidly cheap vs urea & UAN. It will not stay that way forever (demand will correct the difference). DO NOT miss a chance to get it applied.
NOLA
#urea
has been a rollercoaster:
Nov 12 '21 - Feb phys barge $833
Jan 26 '22 - Feb phys barge $485
That is a $350 drop overall and a 42% drop from the high. We have also seen over $500 price volatility during that time (up/down).
Physical NOLA
#urea
dropping to $500 today. Within $100 of the summer low and well below the almost $700 it was in September.
That puts current UAN values at over 20 cents/lb of actual N premium to urea...
switching coming?
So I do not farm, but my family still does. They sent me this pic that their seed guy took with his drone.
Looks a lot more fun than sitting behind a desk!!!!
In a new twist, European nat gas values have dropped significantly. At today's values, most N
#fertilizer
producers are profitable.
However, they need nat gas to stay here/lower AND global markets to hold.
Regardless, this is a bearish signal and a good start to 2022!!
Physical
#urea
buyers have stepped out of the way of sellers once again today which has prices dropping.
February physical Nola barge has broken $600 to trade at $595.
What...a...ride...
Hearing that the April
#NH3
Tampa price has been agreed upon at over $1,600. February price was just over $1,100 and March didn't have an agreed upon value.
If you need me, I'll be over here pondering where in the hell we are right now.
Why are we watching Russia closely from a
#fertilizer
POV? From a world export perspective, they represent:
Urea - 14%
UAN - 27%
DAP/MAP - 11%
They and Belarus represent around 1/3rd of global potash operating capacity.
Likely they will NOT get shut off but we need to watch.
@vishy_g
@narne_kumar06
Not holding my breath that India is self sufficient. Yes, import needs are lowered on new domestic production but not self sufficient based on our numbers.
UP rail situation:
Sounds like the UP is backed up on shipments. As a result, they are restricting "private car" shipments (i.e. not UP equipment) by almost 20%.
We were already struggling with fert logistics coming into spring. This doesn't help at all...
#blackswan
One would think that at 42 years old, I would know better than to tie one on until 1:30 AM on a Tuesday, yet here we are.
Yet, I would not have changed a thing! Had a blast last night!
I know this graph is busy but stick with me.
This is the
#corn
/
#urea
ratio chart going back to 2000.
Today, that ratio sits at 55 ($5.94 corn & $328 urea) after dipping to 50 last week.
Today's value is EXCEPTIONAL...if you lock in both sides.
Lock in that profit/margin.
All, we are less than 2 weeks from March.
I IMPLORE you to have a convo w/ your
#fertilizer
supplier and discuss what you need this spring. We as an industry have cried wolf before. This year is different. I've not seen it like this in the past.
Honestly, I'm nervous.
It's been a long day/week/month/year. I'm going to close the week with this:
Make the
#fertilizer
decisions that are right for your operation.
What works for your neighbor may not work for you. Remove emotion and make the best business decision for YOUR farm.
I've seen several "if I hit so many followers I'll XYZ".
I'm just under 9K which had me thinking about what to do if I hit 10K.
My natural thought was to say "if I hit 10K followers, I'll write positive things about fertilizer all week".
Can't do that and lie to everyone...
Nitrogen, phosphate and potash fertilizers continue to experience downward pressure as demand remains mostly non existent.
However, we are starting to question for how much longer. Year end/beginning prepay dollars and Q1 global demand are about to step up.
Floor may be near.
All, there are so many insane things happening in the
#fertilizer
space that it is impossible to call going forward.
Best thing you can do is look at your operation, run the numbers and make the best decision for YOU. Not your neighbor. Not your supplier. YOU.
India had to extend the window to receive phosphate offers for another week due to NO offers.
Ethiopia did the same for their urea purchase tender.
I do not care where you farm, this affects every farmer on earth.
👏Fertilizer👏is👏tight👏
If you do not think global factors affect your farm, think again.
EU cost of production:
- urea over $1,500 USD
- UAN nearly $1,000 USD
- NH3 over $2,100 USD
World price points are moving higher as a result. New production curtailments feared going forward.
City folks: oh, those redneck country folk want a fight? We will give them a fight.
Please keep this video in mind when those comments are made!!!! This is the stupid shit we do for fun!!!
I say it now and I will continue to say this: you need to work WITH your retailer. You need to stop seeing them as an adversary.
If they knew exactly what was going to happen in markets, they wouldn't be a retailer...
"but the price of fertilizer may go lower"
I hear this a lot about holding off on spring purchases. Fert prices are still high, but so is corn. Check out the updated ratio charts. Lot of much improved value out there...if both sides are locked up.
Be talking to your retailer
I had planned some witty comment about fertilizer markets today.
However, I started watching the videos from Afghanistan...I've lose any humor I might have had.
If you or someone you know served there, thank them and tell at least I thank them for what they did.
I've said this before but it is now April and needs to be repeated.
BE CAREFUL THIS SPRING
Do not overdue it. That last field can wait. Don't work thru the night and fall asleep at the wheel.
Your friends & family would rather you be alive and healthy.
U.S. fertilizer companies - "We will not do business with Russian companies after the Ukraine invasion."
U.S. fertilizer companies seeing a chance to make money on Russian UAN imports:
Everyone in the
#fertilizer
world, high prices are not the worst case scenario.
The worst case scenario is countries shutting down normal shipping patterns. That creates panic/emotion. That creates even higher prices as the market freaks out.
That said, prices look firm.
Just in case you thought the Chinese
#fertilizer
story was a ploy.
I've said it before and I'll continue saying it: this isn't like 2008...it's scarier.
N.A.
#farmer
, don't be surprised by another round of
#fertilizer
price increases next week
#urea
- NOLA physical traded to a new record high of $935
#uan
- likely to follow urea
#nh3
- Tampa price settled over $1,600
#phosphate
- paper trading $1,020 now
#potash
- up another $20
I'm seeing a lot of people talking about wanting to buy their fall '22/spring '23 fertilizer already.
Remember, there are 8 months until November and a full year until next March.
A LOT can happen between now and then. Make those decisions logically, not emotionally.
According to
@ArlanFF101
, the single biggest U.S. percentage corn planting gain in a week is 43% (2013).
To put that in perspective
USDA 2022 corn acreage estimate - 89.5M acres
- 43% would be 38.5M acres being planted in 7 days
- 5.5M acres each day
- 230K/hour
- 3,817/minute
Last time
#corn
was this low was October 2021 (correct me if wrong).
On the bright side, NOLA values were:
#urea
@ $690 (vs $360 today)
#UAN
@ $490 (vs $240 today)
#DAP
@ $680 (vs $580 today)
#Potash
@ $680 (vs $320 today)
Today still sucks, but it worse worse back then.
On June 12th, NOLA urea traded $245
On July 28th, NOLA urea traded $445
Today, NOLA urea traded $350
That's $295 worth of price volatility in just under 2 months.
Lot of inland markets never reflected anything close to the high.
Fertilizer is hard...
Well, someday I'll buy some acreage and farm. Today just isn't that day.
Was willing to spend a little more than we were comfortable with but wasn't enough.
Given what it takes to break even at the price, it wasn't worth the risk of having to "pay" almost yearly to own it.
KC
#wheat
folks:
Using current NOLA
#urea
and July '23 wheat prices, the current ratio stands at 37 bushels/ton of urea.
THIS IS THE BEST RATIO SEEN SINCE 2018 AND ONE OF THE TOP 3 SINCE 2010.
Urea can go lower.
Wheat can go higher.
This is a damn good layer.
Look at
#urea
:
- Higher chance of losing Russia's 7M export tons
- Higher chance Europe loses natural gas flows from Russia
- N.A. significantly cheaper than UAN and NH3
- Grain prices continue to rally daily
I'm not saying urea is going to the moon, but I would watch close.
This map is hard to read but it shows global fert trade flows.
If you ever think that
#fertilizer
is not a world market, look at this map.
What happens in China matters to a farmer in Kansas. What happens in Europe matters to farmers in Australia.
Keep your head on a pivot.
European gas prices have skyrocketed to record highs on multi-year low storage levels and supply concerns, with Asian LNG prices following suit.
Read more for expert insight and analysis on the impact of these unprecedented developments:
#LNG
#GasPrices
For those in media just now starting to report on
#fertilizer
. This is a situation farmers have been battling thru since the summer of 2020.
Russia/Ukraine certainly makes it worse but here is a list of some of the things getting us to today's values...