Fertilizer what if?

[Hopperbin]

Have heard now that if some fertilizer does not start to move into farmers bins that a shut down of nitrogen production may happen here. So the question is at what economic thresh hold do manufacturers here halt production? At what point will other suppliers start to reduce their prices maybe take some loss? How long can we hold off delivery until we put ourselves into a shortage of product situation? Maybe some suppliers would benefit from a shutdown.

[Hopperbin]

Just thought I would mention that SWP matched Pioneers prices for payment and delivery.

[Hopperbin]

Viterra not SWP

[Hopperbin]

FNA new deal. 46 0 0
Estimate 650 per ton.
Pay 600 now take delivery Dec.Jan.Feb.
Maybe pay ballance later after delivery is all done ,get billed later ,maybe not.
Pick up in Saskatoon or Pay trucking to farm.
I asked if was offshore product but the guy talked to was fancy stepping around the origin so could not get it out if was domestic product or not. Could be domestic, he was not allowed to give that information. My spider senses say domestic. How are other's experiences with offshore product?
At the very least they just earned my membership for next year.

[SASKFARMER3]

Fertilizer prices remain on a downward spiral, with news of more plant shutdowns surfacing around the world this week.
But while demand expectations are being scaled back after farmers balked at high prices, there are signs the market may be closing in on a seasonal bottom. Moreover, chaos could emerge in 2009 as farmers who rejected fall applications due to high prices and harvest delays scramble for product in a pipeline that could be dented by the on-going financial crisis.
The good news is that wholesale prices for most products in the U.S. are now starting to reflect the freefall seen internationally. Anhydrous ammonia at the Gulf was quoted at $317 a short ton, down more than $200 from last week and $525 off its highs from earlier in the fall. If international prices are any indication, ammonia may have more room to fall, with the short ton forward price out of the Black Sea down to $208. That would translate into a farm gate price of around $500 a ton or less, so producers should be urging their suppliers to start looking for product and getting deals together.
This unfortunately may be difficult to do. Some suppliers are still sitting on high-priced inventory they may be forced to write down. Others may find it difficult to obtain credit, or to get barges up river before it closes for the season.
Other fertilizer product prices are falling faster for farmers, though offers to the farmer remain high. Urea at the Gulf was quoted at $282 this week, down a little from last week, although forward prices out of the Black Sea are stabilizing, with January quoted higher than December. However, China announced a cut in its export tax, which could put more product on the international market soon.
DAP at the Gulf is also lower, falling $100 or more in the latest week to $595, with January prices bid at $450.
Meanwhile, natural gas in storage increased 62 billion cubic feet in the latest week, more than the 45 bcf expected by analysts. The government earlier in the week said industrial demand for gas is expected to fall due to the weak economy, with prices average $6.82, $1.35 lower than its previous forecast and less than 2007. Natural Gas futures edged closer to a test of $6 after release of the storage report today.

[LWeber]

I get enough grain politics and try to stay out of the fert game other than posting prices once a week; however, my math says Black Sea to Saskatoon at CAD$593.00 per metric tonne for 46-0-0 in containers. The $600 will cover their up front costs...

If it is bulk break freight - knock off another $61.50 a MT or CAD$531.50/MT track Saskatoon. (China -Vancouver Panamax freight traded USD$25.00/MT this week).

45,000 MT vessel @ $118.50...well u do the math ...

[LWeber]

And to turn a fert post into a CWB post before Tom does...

No Chuckchuck, Vader or whatever you are calling yourself this week, you can't sell memberships to the CWB and take $118.00 a tonne...that would involve choice and besides you leave half that much on the table now for free.

[boarderbloke]

it was commented on BNN today that YARA has announced that it is cutting production of nitrogen at it's NA plants

[bucket]

Warehouses must be full. These guys wouldn't slow a plant or think of idling one unless for maintenence. If you have ever been at a shutdown near the end - panic is the only way to describe it. The money these guys lose by not running makes maintenence foreman pull their hair out.

Sorry guys - what bnn talks about and what is actually going on are 2 completely different things. Management gets the same type of PR people that the cwb gets. They are paid to sugar coat everything.

Do you really believe Yara is going to say publicly they haven't sold alot of fertilizer for the last two months because their price is too high and their warehouses are full of mispriced product. The analysts and kevin oleary would go crazy.

That would be like the cwb saying they made long term contracts at low prices to algeria which has affected their ability to get better results for western canadian farmers for years to come.

Back to fert - it is very expensive to slow or stop production at a continuous flow plant and from a safety point its unlikely. Its simple they are full and they are looking at ways to get the product out which includes lowering prices.

I would wait it out. Farmers can make them lower prices.

[parsley]

The only thing much moving at the present time is verbal fert.Is hanging tough a good idea? I sure would if I used fert. And then there's always the "unknown" factor that wades into the mix. Storms come in out of nowhere. Pars

[redbaron]

Farmers are business managers. At least we like to think so. We need to look at the numbers. At today's input costs and the commodity prices it is impossible for most to make a buck. So why would you lock yourself into a loss. A lot of us are considering doing just what Yara is doing. Stop production. Like YARA - is that really an option for us farmers. So the duel between the pitcher and the batter continues. Time will tell if there is a home run or just more foul balls.

[agstar77]

The problem with waiting it out, could be a worldwide food shortage. Fertilizer suppliers have been irresponsible in allowing this situation to develop. The free market may work eventually , but will it be too late? Governments are meeting and all hot and bothered about the financial crises , will they be as excited by a world food shortage?

[Hopperbin]

Agstar we in Canada do not feed the world.
The CWB used to tell us that to make us feel better.
My guess that FNA is selling local made product now most likely true. As cheaper offshore product is moving further north taking sales away from Canadian Fertilizer manufacturs. That offshore stuff may be coming in so cheap that a shutdown is inevitable as a large portion of their production goes south across the border.
We are only a drop in this large bucket.
True a shutdown is not what they want, so our prices should come down. What should happen and what does happen can be two different things. I would prefer not to use lumpy fertilizer also, harder to auger and plugs up air seeder lines.

[GreenValley]

from what I read Producer paper, a group of 5 hutteries colony has 5 cargo of urea sitting in Montreal that is waiting to be tested and inspected. Other cargo shipping is on way to Peace River Coop. Maybe retailer may blend cheaper fertilizler into high price. Other wise price range may seen around 400 to 450 offshore urea price. Have not bought yet.

[bucket]

Food shortage? Good point agstar. But with the stocks building in grain I doubt anyone notices it is only on paper. The production and quality numbers don't tell me that usable grain is overstocked. The sad part is that the same people doing numbers on grain are very similar to the guys that figure house mortgages and ways to put a positive spin on it. Its all manipulation. Why do I mention this? Well how does statscan find 750000 tonnes of canola and more flax unless someone is fudging the numbers.Come february stocks will start to magically tighten up.

Fertilizer halfway around the world has inputs (natgas and labour) one tenth the cost of north american plants. This is why the NA plants have been moved around the world. Yara buying belle plaine may be a strategic move to eliminate production. Mosaic did it with phos in florida or one of those southern states. Now they can't re open them without a billion dollar re investment.

Less fertilizer, less grain, more starving. Is it the farmers fault. Not really but politicians don't really notice until they themselves are starving. Unfortunately by then it is too late.