Fertilizer Pricing is a Puzzle

I spent a an hour today talking to several people who understand the fertilizer market better than myself. I am trying to get a better handle on where the price of urea is going to move between now and spring. Common sense tells me that is corn is going to drop between $4 and $5 urea cannot hold at $900 per MT. If the price of urea does hold I think that it is going to significantly squeeze the bottom line of farmers across North America. when corn was $7.50, $900 urea was tolerable and possibly justified based on the demand. As Ag-commodity prices move closer to the lows of 3 years ago, operating margins are definitely being squeezed like a bear hug from Andre the Giant.

If commodity prices continue to depress and fertilizer prices hold the North American farmer is definitely in for some tough times and we will all sit back and remember the one good year of 2008.

I am planning on continuing my research on the subject and sharing my finding in this blog, in Grainews or in the Haney Farms Quarterly.

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