NITROGEN FERTILIZER PRICES EXPECTED TO PLUNGE AS NEW PLANTS COME ONLINE

[SASKFARMER3]

Recent analysis of several hundred nitrogen fertilizer production facilities spanning the globe indicates that the industry is headed for overcapacity.

As soon as 2019, fertilizer producers will find little pricing strength as global utilization dives to ~73% as new facilities come online.

Neil Fleishman, CFA, Director of industry research firm Green Markets stated "There is high confidence in a long run bearish view on nitrogen prices as supply is continuing to rapidly outpace demand.

"The next year will be a tipping point in that multiple expansions in Russia, Brazil, Argentina, Egypt, Saudi Arabia, Bangladesh, India, Indonesia and Vietnam will contribute to a global glut." Fleishman is closely tracking the trend, and while the global picture is one of oversupply, he reports significant variability at the country and regional level.

The North American nitrogen fertilizer market (which includes production of primarily Ammonia, Urea, Ammonium Nitrate, and UAN) is capitalizing on cheap gas and expanding capacity by magnitudes that once seemed implausible.

As such, Fleishman indicates that "...the next several years will see the North American fertilizer market turn as domestic production replaces imports and export availability disrupts global dynamics. Lower global utilization levels will keep a lid on price."

The Global Nitrogen Supply & Demand Model from Green Markets updates fertilizer market-balance data on a quarterly basis for this key nutrient category. The model tracks individual factory output, at the country level.

Some how I just don't believe Canadian farmers will enjoy this new found cheap fertilizer.
Unless the infrastructure changes in Canada and we can get product out to central Canada and turn around and get our products West.

[bucket]

It should slow exports from Belle Plaine considering transportation issues while other locations pull it in from better serviced locations.

I am not sure why FNA doesn't build a mother of a warehouse and sign some contracts to move fertilizer to mid point prairies using cars that are coming back empty.

Or buy some cars and move grain out and bring fertilizer back.

Cut a deal with k s potash to use their cars for a back haul.

Bethune would be a great place for a nitrogen warehouse.

Even just one 175 car unit train a week would bring the price down.

[farming101]

Is there any kind of sizable facility to unload/transload bulk fertilizer at the west coast?
Just wondering.

[wmoebis]

The problem with using grain cars to move fert is cross contamination of grain.
Someone would have to ensure every spec of fert was completely cleaned out of the cars.
That is in part, why you have to declare what your last load was when you haul grain.

[LEP]

They use the same cars all the time for fert and grain.

They is an allowance in ingrain for alittle fert contamination. Check CGC specs.

[bucket]

Cleaning grain cars equals job creation.

Probably get funding under growing forward or that other plan.

Ks potash sends potash out, loads nitrogen back to bethune. Reduce their rates.

Bethune is on a major highway. Or they could have distribution points from bethune to vancouver serviced on a back haul by rail?

[freewheat]

If the RR can not get our grain to port, why would we think it can get fert FROM port?

We are underbuilt. We should stop using fertilizer in the first place for a year.

We need a couple of new lines built.

[wmoebis]

Agree LEP however ISO over rides CGC guide.

Note: Canadian Grain Commission personnel should refer to ISO national work instruction “Suspect Contaminated Grain, Handling Procedures” for procedures to be
followed when handling samples containing fertilizer pellets.

If your elevator finds on fert pellet they are suppose to reject load.

Agree there is ways around issue.

[binthere]

oh yes the fert producers will be giving there product for less just like the oil companies are giving cheap fuel now with the huge oil glut.

[foragefarmer]

Freewheat "stop using fertilizer for a year"? Your joking again??? Right!!!!

[freewheat]

Yes, forage farmer, you got it! Congratulations! lol.

My point is, we grow too well for what we are built to export. Yet we push for more production.

[ajl]

There is no ability to unload bulk fertilizer at the west coast and there will not be any time soon due to space constraints and BC unions. Only stuff coming in will be containerized. That is why we pay the Canadian price and the rest of the world pays world price.

[farming101]

Thanks. So fertilizer from overseas through Vancouver would be 1 tonne minibulks in containers or packed in ships holds. I think I see a logistics problem.

[Rareearth]

ItÂ’s time to start thinking about spring fertilization. We are seeing some positive direction on the price of N (urea) at the Twin Cities terminals. As of this writing, I can source river open urea at $350/ton. This is down $100 from where it was just a month ago. I think we will possibly see a further drop before planting, but remember that we need to still get it out from the terminals. P and K pricing is staying flat and will most likely stay that way or even go up slightly at planting. I would highly recommend that every farmer with a liquid system look at Pro-Germinator and Sure-K as their total P and K system because the price is down 20 percent from last year and itÂ’s a way to efficiently deliver P and K at a lower price.

Hefty North dakota,
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