big drop

[jensend]

yara's website shows big drops in urea and phosphoric acid prices this week.

[SASKFARMER3]

what did I say jensend watch out the price will drop and drop it is.
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

Oct 09, 08 830 535 494 2138

Oct 16, 08 830 340 494 1943
I still don't advise purchasing any fert yet.
Have neighbors putting on .88 cent anhydrous and just cant believe it.
Makes me wounder.

[furrowtickler]

Same here, and burnin $1.20 deisel like there is no tomorow. Oh, and loosing that moisture we got last week.

[SASKFARMER3]

I have one, who you could hit over the head with a 2x4 and he would still think its OK to pay high price for anhydrous. Yea he is a CWB supporter so maybe its true, some people just don't get it.

[SASKFARMER3]

Anhydrous in western Canada is close to $600.00 a ton to high. People your getting screwed.

[bucket]

Warehouses are full - where are they going to put the production now. They won't stop producing with a falling nat gas market. The reason its not dropping yet in saskatchewan is that some fertilizer dealers are going to bankrupt because they bought high priced fertilizer. too bad so sad.

[poorboy]

Funny thing is farmers and fertilizer dealers are in similar situtions.

Canola was $13 a bushel also, so I filled my bins with the thought that it was going up. It has since fell to that $8-9 range. I can now hold out for $14 and higher or I can start to take my losses and sell for $8-10 because the market has softened.

Fertilizer dealers are the same as farmers, the only thing they have going for them is lack of competition. They have only about 2 choices for fertilizer supply and they are not about to undercut each other until they try and sell all their high priced inventory.

Imagine if all the canola in canada was held by 2 farmers. They would also try and preserve the $13 that they filled their bins at. However, eventually all the world buyers would source their needs from elsewhere. Fertilizer prices will eventually drop to near world prices, but it will take time.

If farmers were on accrual accounting instead of cash accounting, there would be no year buying. Most ferilizer dealers know that a lot of farms must buy something before year end, and it is usually fertilizer.

[TOM4CWB]

poorboy;

You forgot... many many many farmers ALREADY bought last spring/summer... and have as much $$$ inventory now... or MORE... than any previous year for a very long time!

I doubt they need to do anything but sit and wait!

[vvalk]

Saskfarmer. I find it very amusing how you predicted a disaster with yileds and made fun of the "bumper" crop out there. Now you are making fun of all the high priced fert and people who bought. The only reason fert is down is because of the 1 in a million chance of the perfect storm. A 12 million tonne canola crop and a world financial crisis. So now we lose $200 an acre on revenue but now you save $25 an acre on fertilizer. Man your smart!

[TOM4CWB]

vvalk,

It is crystal clear... that a 'plan' that is balanced... both on risk and profit... covering inputs and market sales... is required for the large farm today.

Family farms... are around for the long term... and are not primarily driven by 'greed'.

Short term possibilities of mega-profits always present themselves... but seldom bare fruit.

Our job as managers is to temper the words of Saskfmer3 with reality.

I still appreciate his point of view... and hope he speaks his mind... from his point of view.

We on the other hand... must know how to separate the wheat from the chaff... for our particular situation...

In the end... it is all about 'balance'... and I appreciate all points of view... even if I don't agree in my situation or perception... they hold valid management points for my family and farm!

Thanks for your hard work... and dedication to our industry!

[bucket]

poorboy

You are right about the similarities but the last time I checked not many people eat fertilizer. But they do eat grain. If the fertilizer price stays high farmers buy less and in turn they produce less and in turn people have less to eat. So they either pay more for grain or they starve. I prefer to let the fert dealer starve rather than give him my hard earned money or grain - I can still eat.

Although to add balance and maybe cotton can confirm this strategy. Buy agrium or potash shares and use the gain to offset higher fertlizer prices if prices go back up. I think those share prices may look like a bargain right now.

[SASKFARMER3]

Vwalk or what ever Yes I did call the bumper a big joke and with the short crop in Peace country and poor one south of Number one. It looked like it to me. We still have close to 2000 acres out, a friend has 6400 acres another 4000 and another 2000 of canola if this weeks forecast come trough we wont get it. Most is canola so number wont be where their saying. Wait the USA is so full of Crap with their soy yield and corn, Australia has frost problems with their crop and Brazil and Argentina are dry watch out in Feb and march again. Fert was way to high all along their was no reason in the world that prices should have been where they were. Yet the sheep kept buying from the wolves. So all I was saying is wait the price is to high. Last year I bought all in March when local dealer was worried, really worried. Paid same price as Early December. Its a game.
The global economic slowdown continues to cheapen fertilizer prices as the growing season ends in the northern hemisphere. After falling $80 a ton last week, bids for urea are down another $70 this week in New Orleans, with buyers now seeking barges at $380. With bids for December out of the Black Sea even lower, prices could be headed down again next week unless the economic outlook stabilizes quickly.
Lack of credit for shippers and distributors caused by the financial crisis is one reason for the slowdown. Farmers also are hesitant to book supplies with crop prices in virtual free fall.
Little business in anhydrous is being done at the Gulf, where official prices are still at the $845 a ton level from August. International spot prices continue to soften slowly, but forward bids are down dramatically, about 40% off where the market last traded. That suggests prices at the farm gate could drop to around $700 to $800 a done in December/January, if supplies are able to get product.
Already, some dealers reportedly are indicating they’re being contacted by industrial suppliers with ammonia to sell because U.S. businesses are cutting back production. Trouble is, many coops and local dealers already locked in supplies at much higher prices, inventory they may either force on farmers or have to write down.
Also VWALK not all farmers had a bumper this year remember some had bellow and some average and some had hail, So why brag. It was a good crop that's enough said.

[Hopperbin]

Bucket you mention. The reason its not dropping yet in saskatchewan is that some fertilizer dealers are going to bankrupt because they bought high priced fertilizer. too bad so sad.
Many farmers pre paid high prices for fertilizer. But for a dealer to go out a purchase high without a sure sale then maybe they deserve to go bankrupt. Don't get me wrong I hope all suppliers are around next year. In my area we still have competition among suppliers. It would also not be in the fertilizer manufacturers best interest to bankrupt our suppliers. Lets hang tuff, our prices will come down.

[cottonpicken]

Another fert info source

http://www.fertilizerworks.com/fertreport/pdf/2008/TheMarket-101708.pdf

I like the "plunging" part

[wade]

Thanks for the link cotton