Fert starting to trade lower!

[SASKFARMER3]

Jul 31, 08 775 820 516 1727

Aug 07, 08 810 815 543 1727

Aug 14, 08 800 793 523 1727

Aug 21, 08 843 770 532 1727

Aug 28, 08 853 790 530 2268

Sep 04, 08 880 803 519 2268

Sep 11, 08 880 770 510 2268

Sep 18, 08 870 713 531 2268

Sep 25, 08 860 645 538 2268

Oct 01, 08 835 590 505 2138
Fert is starting to drop. Wow one would have to guess that since farmers all over the globe are getting kicked in the head buy current financial meltdown, all are thinking like myself the price of inputs are way to high and we wont use them if the prices continue to decrease.
Simply if Canola is 7 next fall at 40 = $280.00 an acre if it gets hot in July that's 30 if it freezes early that's 25. Sask crop insurance still with changes coming not address this.
Fert costs as of today
100lbs anhydrous plus 80lb blend of 11 51 and 21-0-0 21 cost at today's prices = $140.00 close to half a excellent crop or more at 25 you have 35.00 for your bills at 30 ,70 for your bills or 40 = 140 for your bills. Now take just seeding and keep back 1/4 of this years crop for next year and take seed right out of the bin.
Seed = 1. seed treatment spray for bugs 2. an acre
No fert or next to nothing.
Crop 12 - 15 or 20 = 84.00 or 105 or 140 plus 1/4 of this years crop your money ahead.
Other thing to watch with canceled sales on fert coming due to credit problems and fert dealers on a shoe string to watch for fert bankruptsys coming.
Don't be stupid and believe that the price has no where to go but up. They screwed us for a year on plain and simple greed not supply and demand now let them eat their cake. Food is food and if all get smarter at who is in control of the situation now its us. So before you blow out your crop to buy fert sit back take some holidays and relax whats the worse thing that can happen you pay today's price next spring if the markets turn around. You still have your product to sell and we aren't going to be seeding a crop for another 7 months.

[jensend]

fertilizer prices will drop if the present trends continue. the dealers and manufacturers know they can hold out until late winter with high prices and get it moving in the spring with lower prices if they have to. it will probably get to be a game of chicken later on unless everything falls apart over the next few months and then it's anybody's guess. i think what's happening now shows that higher grain prices just mean higher input costs. the only thing that's really changed is the price level and hence the risk level.

[SASKFARMER3]

Jensend look at the big picture the grain companies made money on only one thing last year it was inputs. Fert and Chem made and Seed companies made large very large profits.
So do you not think some major screwing took place.
But farmers most of them missed the large prices last fall because they sold to early most of their product so that they could get fertilizer purchased and seed etc. So simply if the farmers is cash poor the grain and fert and chem companies are in control, if the farmer sells sporadically to pay bills and builds cash who is in control.
Don't you get it when we need them they can do what ever they want, when they need us its our game.
Because if the market taught us one thing the last 12 months is that we are on a new learning curve as far as grain production goes and maybe just maybe the big boys aren't as rich as they want us to believe. What did the cargills and Richardson's and ADM due when Canola and Soy and Corn went nuts in hours they cut off farmers from forward selling their product.
Cash is king boy!

[jensend]

i've seen all that for years. you might be the one here suffering the late awakening. they've been playing the same game for years. that's why i say the market is imbalanced with few sellers and many buyers. all that's changed is the number of zeroes at the end of your fertilizer bill. that yara site that you posted the link to shows so much. sure fertilizer prices have dropped at those shipping points but look at dec 20/2007 and tell me how much they are hurting by dropping 46-0-0 by a hundred or two hundred dollars. they're holding the hammer still and they can wait. if viterra doesn't sell fertilizer it's you who doesn't grow the crop and viterra won't have fertilizer in inventory. they'll lose the margin on what they don't sell. if inflation comes the way cotton believes the prices today will look like a bargain. the farmer is the one taking the risk. they've laid off a bunch of their risk by boosting prices to a very profitable level and can sell whenever. we can all say prices will drop because farmers can't afford it but there is no certainty.

[charliep]

Likely in your thoughts but will have some caution about the impact of higher prices on dealers cost of carrying inventory and ability to lay in supplies on anticipated sales for next spring. Had a comment from someone who runs a small independent fertilizer and their line of credit to source product has expanded from $2 mln to $6 mln just base on fertilizer costs. A solid company but the bank needless to say started to get nervous. Also all this inventory is subject to fertilizer price moves (same as a farmer holding grain inventory). A 10 % move fertilizer price is $600,000 for the indendent dealer if they have pre-purchased. Margins may be good but can a input suppplier afford to take the risk of this type of loss?

Not arguing with anyone whether to pre buy or not. Need to recognize the risk around logistics need spring and availability. Given US needs a 12 to 13 bln bushel corn crop every year to meet their consumption/export requirements, they are not going to reduce fertilizer use. China and India will not reduce fertilizer use to feed a human population that is 30 % of the world.

[agstar77]

And exactly why would we pe-buy to guarantee a loss? If we don't seed an acre or without fertilizer ? Not farmers but all those who live off us. If you have no debt and don't need to plant a crop why would you? A little hunger might focus everyone on what is important. Why would banks lend you money to lose money , they would be killing you with debt. If interest rates rally next year ,that debt would destroy you.

[SASKFARMER3]

Jensend I bet some where your connected to the Fert industry. Simply if farmers all over are getting killed on prices. Why would they grow a crop to feed the Fert and Chem companies. Also read Vitterra etc. statements they made money on one thing supplies. That's it.
So us stupid farmers over paid for their product.
Simply I don't think Ill get hurt buy not buying fert unless they move from their stupidly BS supply etc bs position.
BS is running rampant in the Fert industry yet people like Jensend just don't get it.

[jensend]

i don't have to connected to the fertilizer industry to have a fair understanding of what's happening. i've said before that glyphosate and n fertilizer are the crack cocaine of grain farming and, like it or not, you'll be happier using them. the input companies know that. once you're on the minimum till, high inputs track it's pretty hard to get off it. if there's a contribution margin to overhead in growing a crop eighty per cent (at least) of farmers will take the risk.

[SASKFARMER3]

Not when the banks are going to cut your operating by 1/2 for 2009. See clients already that are going to get only 1/2 what they used this year.
Also fert deal out their where India canceled boat of 46 and its available at 100 ton delivered to farm less than local market picked up.
The games in fert market are starting to heat up.

[furrowtickler]

Show me a current contibution margin, based on today's grain/oilseed prices, or lower, and an average crop? The last time I seen one printed was on 90bus durum @ $9/bus with current fert prices - this was some clown in southern Manitoba. I would like to see him do the math now or in a month from now with real average yeilds.
It is simple, take the five year average yeild - not the highest ever recorded, on your farm for a specific crop and run today's numbers, As of this moment in time that 80% you talk about will loose money next year if they book today's fert prices and grin price stay where there at or go down further.
Check out agriculture.com - and look at what the American's are saying - the same thing as S/F, me and others are saying.
Fert companies at this point in time do not care if you you go broke next year, they need to sell overpriced fert, lots of it, and now! They are going to push you very hard or their stock prices are going to tumble even further. Not one of them cares that grains and oilseeds are tanking, their pricing has been made on june - july markets.
Feed your family first not theirs, input suppliers needs farmers not the other way around. I do not mind paying a fair dollar for something but not 40-50% more for something B/C they screwed up and bought at the highest price in history and are trying to sell into a falling market. As farmers we take this on the chin all the time, we survive but not this time - walk away and wait.

[SASKFARMER3]

I agree the Americans are starting to ask questions, why because lots of them are not getting credit to buy fertilizer. Its simple and maybe the banks know something about politics after the fed election in US and the reality hits of their huge federal debt maybe they will start to cut certain programs and price supporting measures that farmers now get their. This one is reality don't buy under the current economic situation. Let the Viagra Conagra's cargills adms agrium and Saks potash get a blood bath. They deserve it. Were not seeding for over 7 months from today.

[furrowtickler]

Wow, I wish I could spell check, LOL.

[SASKFARMER3]

To busy to hit the spell check next time Ill get it right.

[cris]

look here boys (people), we had a great crop in north east SK, but that crop is ours! I've got my grain and I am not sinking all my profit from this year to support next year. Next year will have to work on its own. The markets will have to move up or inputs down, or we will use significantly fewer inputs.

[furrowtickler]

cris, we will do the same starting with chemfallow to reduce risk. BTW, red lentils traded up .03/lb recently amid the "crisis".