Sunday, November 28

Fertilizer shortages can lead to a spring flurry on North America’s farms – archyde

Nov. 24 (Reuters) – A global nitrogen fertilizer shortage is driving prices to record levels, causing North American farmers to postpone purchases and increasing the risk of a spring scramble to apply the plant nutrient before the planting season.

Farmers use nitrogen to increase corn, canola and wheat yields, and higher fertilizer costs could lead to higher meat and bread prices. Continue reading

World food prices hit a 10-year high in October, led by spikes in grains like wheat and vegetable oils, according to the United Nations Food Administration. Continue reading

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The Arctic explosion in Texas in February and Hurricane Ida in August disrupted US fertilizer production. Then the prices for natural gas, an important input factor for nitrogen production, rose in Europe due to the high demand and the low supply. Global urea prices topped $ 1,000 per ton for the first time this month, according to BMO Capital Markets. Russia and China have curbed exports.

In the United States, there is enough nitrogen fertilizer supply for pre-winter applications, said Daren Coppock, CEO of the US Agricultural Retailers Association. Spreading fertilizer before winter reduces farmers’ spring labor.

But with prices this high, some farmers delay their purchases and risk a scramble for supplies during their busiest time of year, Coppock said.

Global fertilizer sales were $ 53 billion in 2020, and prices are at least 80% higher so far this year, according to Argus Media.

Typically, MKC, a Kansas agricultural cooperative, sells fertilizers to farmers for upfront payment that are delivered months later, reassuring farmers of an important expense.

In light of the rising prices, MKC has reduced its prepaid sales out of caution.

“They just don’t know what the price will be. That has put many retailers in a difficult position, ”said Troy Walker, director of retail fertilizers at MKC.

If fertilizer purchases are postponed until spring, there is a risk of further overloading the supply chain as farmers rush to spread fertilizers and seeds during a tight window of time.

“There will be a lot of people who will wait and see,” said Coppock. “(But) if everyone crawls to get enough in the spring, someone’s corn won’t be covered.”

Wisconsin farmer Jim Zimmerman decided to take a bite of the bullet and secure all of his manure for spring this year.

“I’m worried about next year prices,” Zimmerman said. “It could get worse.”

Nutrien Ltd (NTR.TO), the US’s largest agricultural supplier, has secured less than usual nitrogen fertilizer for spring supplies because manufacturers are making less available, said Jeff Tarsi, the company’s senior vice president of retail. Selling to farmers will likely come closer to spring than usual, he said.

The only nitrogen product that is becoming scarce in North America is urea ammonium nitrate (UAN), said Kreg Ruhl, manager of phytonutrients for the Illinois-based Growmark agricultural cooperative. UAN is a liquid form that is convenient for farmers to use.

The US International Trade Commission is conducting an anti-dumping investigation against UAN from Russia and Trinidad and Tobago at the request of the US manufacturer CF Industries (CF.N).

Importers are reluctant to book deliveries until 2022 as they may have to pay retroactive tariffs if CF wins the case, Ruhl said.

Farmers could reduce their fertilizer needs by growing more soybeans and less corn, but little evidence suggests that many plan to do so.

The U.S. Department of Agriculture predicts that U.S. corn plantations will decrease from 93.3 million acres in 2022 to 92 million acres in 2021.

Waiting until spring to buy fertilizers could disappoint some farmers, said Matt Conacher, senior fertilizer manager at Federated Cooperatives Limited, a Canadian wholesale seller.

“My advice is if you can get your fertilizer now, do this.”

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Reporting by Rod Nickel in Winnipeg; Additional reporting from Julie Ingwersen in Chicago; Editing by Caroline Stauffer and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.


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