Market Outlook: Analysts Share 2015 Fertilizer Price Outlook

Market Outlook: Analysts Share 2015 Fertilizer Price Outlook

Corn and soybean producers need not rush to lock in fertilizer prices by early winter. That’s the assessment of Gregg Ibendahl, associate professor of ag economics, Kansas State University. He points to falling oil prices. 

“That might be an indication that fertilizer prices may have some downside yet,” Ibendahl notes.

In general, seasonal price patterns are likely for NH3, UAN, MAP and potash in early 2015, adds Barry Ward, assistant professor, Ohio State University Extension 

“This would suggest reasonably flat market prices, then increasing as demand ramps up into late winter and early spring,” Ward says. “Even with this potential scenario likely, low projected crop profit margins will likely restrain demand and restrict fertilizer price increases to relatively small percentage increases. Weaker than expected demand as a result of low projected margins could change this scenario if this weaker-than-expected demand pressures sellers to lower prices to stimulate demand.”

As of late December 2014, fertilizer prices stood at levels slightly higher than those seen a year ago, Ward notes. “Production issues, short gas supplies, plant turnarounds and political unrest have lent support to higher prices,” he explains. For 2015, relatively flat fertilizer markets are possible given lower profit margins that will compete with logistical concerns and strong equity positions. 

A good time to make fertilizer purchases will be February 2015, Ibendahl says. Yet he cautions producers to not delay purchases significantly to avoid the possibility of an unexpected price hike.