Lower fertilizer prices in the United States are not translating into lower prices for Canadian producers.
Retailers say a weak Canadian dollar and the demand required in a short period of time are two reasons fertilizer prices in Canada have either held, or even increased in some cases, as planting time approaches.
"The devaluation of the Canadian dollar versus the U.S. dollar as compared to nearly one year ago has assisted in creating stronger than expected wholesale fertilizer prices in nearly all nutrient segments over the past four months," says Mark Biedenfeld, region director with CHS Canada.
"While many would have expected fertilizer prices to further soften due to reduced North American grain prices and weak energy prices, the Canadian dollar versus the U.S. dollar spread has negated virtually any relief that many anticipated seeing."
While Biedenfeld believes Canadian retailers are positioned well for the spring season from product supply and logistical points of view, he anticipates fertilizer prices will remain strong in virtually all product segments through the spring planting season.
Glenn Houser, assistant vice-president of crop inputs at Cargill Limited, says farmers are finalizing the last undecided acres with the goal of maximizing returns.
"The news of fertilizer pricing softening in the global market may be clouding some decisions, but to be clear we don't expect Canadian retail fertilizer prices to soften as we move into the planting season," he says. "With that in mind completing decisions and getting product ordered will help ensure a smoother spring.
"There is good supply in the system now, but there is only so much transportation capacity and production blips can happen," Houser adds.
Biedenfeld is most concerned about phosphate and sulphate products for this spring.
"Both continue to see increased demand in the absence of new Canadian production," he says. "While I do believe Canadian retailers have done a terrific job in positioning these products for their customers, there could be some challenges in meeting 2015 spring demand in its entirety."
Both Biedenfeld and Houser anticipate prices will reset after the spring planting season, but Biedenfeld says he does not foresee it being as substantial as it may have been in recent years.
As a result, Biedenfeld advises producers work closely with their fertilizer retailer after the spring season to determine market opportunities for purchasing and/or taking delivery of product for the 2016 cropping year.
"When evaluating potential purchase opportunities," Biedenfeld says, "we strongly encourage looking at them from a holistic point of view where a fertilizer purchase strategy works hand-in-hand with a grain hedging strategy to not only mitigate risk, but to lock in an acceptable margin per acre for the 2016 season."
Retailers say a weak Canadian dollar and the demand required in a short period of time are two reasons fertilizer prices in Canada have either held, or even increased in some cases, as planting time approaches.
"The devaluation of the Canadian dollar versus the U.S. dollar as compared to nearly one year ago has assisted in creating stronger than expected wholesale fertilizer prices in nearly all nutrient segments over the past four months," says Mark Biedenfeld, region director with CHS Canada.
"While many would have expected fertilizer prices to further soften due to reduced North American grain prices and weak energy prices, the Canadian dollar versus the U.S. dollar spread has negated virtually any relief that many anticipated seeing."
While Biedenfeld believes Canadian retailers are positioned well for the spring season from product supply and logistical points of view, he anticipates fertilizer prices will remain strong in virtually all product segments through the spring planting season.
Glenn Houser, assistant vice-president of crop inputs at Cargill Limited, says farmers are finalizing the last undecided acres with the goal of maximizing returns.
"The news of fertilizer pricing softening in the global market may be clouding some decisions, but to be clear we don't expect Canadian retail fertilizer prices to soften as we move into the planting season," he says. "With that in mind completing decisions and getting product ordered will help ensure a smoother spring.
"There is good supply in the system now, but there is only so much transportation capacity and production blips can happen," Houser adds.
Biedenfeld is most concerned about phosphate and sulphate products for this spring.
"Both continue to see increased demand in the absence of new Canadian production," he says. "While I do believe Canadian retailers have done a terrific job in positioning these products for their customers, there could be some challenges in meeting 2015 spring demand in its entirety."
Both Biedenfeld and Houser anticipate prices will reset after the spring planting season, but Biedenfeld says he does not foresee it being as substantial as it may have been in recent years.
As a result, Biedenfeld advises producers work closely with their fertilizer retailer after the spring season to determine market opportunities for purchasing and/or taking delivery of product for the 2016 cropping year.
"When evaluating potential purchase opportunities," Biedenfeld says, "we strongly encourage looking at them from a holistic point of view where a fertilizer purchase strategy works hand-in-hand with a grain hedging strategy to not only mitigate risk, but to lock in an acceptable margin per acre for the 2016 season."
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