Fall Fertilizer Prices – LERGP Podcast #141

Fall Fertilizer Prices – LERGP Podcast #141


This is Kevin Martin joining you this
week with an update from the Lake Erie Regional Grape Program about some
fertilizer prices. We are in the middle of harvest so it might seem like a funny
topic. Just to kind of get you updated on where we are in our harvest season, it
looks like our harvest is going to run about a week longer or maybe 10 days
longer than it normally does. Things are actually proceeding well. We have better
weather than the country on average, and I’m going to talk about that in a second
as it relates to fertilizer prices. But what that means for us just practically
speaking, is our loads are getting harvested more quickly. Growers that had
Brix accumulation happen fairly early got a little bit ahead, so they’ve got
some unusual free time. Not a ton – they’re still busy. But we have been getting
questions about fertilizer as growers prepare, at least hopefully, for some fall
fertilizer applications. In the rest of the country things look a
little bit different. USDA announced what I think everybody already knew – corn
harvest is well behind. A lot of that is relating to maturity, but also to weather.
We’re seeing some snow and a lot of rain in parts of the country that are
delaying that. You know, in terms of grapes our fall has been relatively dry
for us compared to other years. But what that means directly for us is that
this is two years in a row where fall applications of fertilizer in other
parts of the country are gonna be depressed, or at least that’s what the
market is starting to speculate. Anhydrous which is most heavily impacted
in a negative way on poor fall weather, is down the most. It’s down 10% in the
last week. It is still up year over year, just slightly. But what that means
for us is not a whole lot because we don’t use anhydrous. What I would
watch is right now urea prices are down 7% for similar reasons and also
because there’s some bearish sentiment about crop prices. So that’s where
growers who do take pre-orders will start to see an advantage over the next
30 to 60 days. What we ran into last fall was that those good prices on urea did sort of go away. With the lack of anhydrous
going on there was some speculation that corn and field crop growers would
make up for that with additional urea applications in the spring. So that
is something to watch. We did see that last year. MAP DAP all of those prices
are down in the two to eight percent range over the over the last week and
again for the exact same reason at least for the most part. We don’t use a lot of
MAP or DAP. We are as we see some recommendations coming in when the pH
does get good that doesn’t always fix phosphorus problems in our soils. So
there is a reason to put some phosphorus down. Ideally speaking, the budget minded
person that I am, I do tend to like super phosphate. If you really do have a
deficiency. It’s about half the price as a MAP or DAP product. But what
that does mean is you’re not getting any nitrogen with it and it will mean a
special application. So if you get a recommendation of twenty to forty pounds
of phosphorus it might make more sense to combine it with your nitrogen
application and then you’d be looking at a product like MAP or DAP. And you
should probably be pretty sensitive to price because those products are
widely used and in higher demand so they cost a bit more. The big thing for the
grape industry, as we all know at least in terms of cost, are going to be potash
and lime. So in terms of potash those prices are going to be fairly
high compared to last year. They’re up about ten percent from last year. We’re
seeing lots of concerns in the market. there’s a lot of potash
available. Inventories are way up. The mines are kind of scrambling – some of
them have shut down for about eight weeks temporarily to try to work through
that demand. It just hasn’t at all translated to changes in retail prices
yet. So it’d be something I’d watch. I probably wouldn’t be in a rush to
purchase potassium unless I needed it. I know that a lot of it should and does go
on in the fall. A lot of growers are considering
split applications of potassium when we recommend really high rates for growers who are deficient.
Might be something to consider because you might see a savings in terms of your
materials cost just because you do that. If you put some on in the late fall and
some on in the early spring that might be another reason to do a split
application above and beyond just trying to make sure you’re utilizing it
as efficiently as you can. Lime prices are probably going to be up
as well. We don’t see much movement in lime pricing but we are seeing with all
of our fertilizer increased costs in trucking and transportation. And that’s
really what hits lime the hardest. So I don’t have any quotes yet. Those are
usually more real-time, especially as they relate to transportation cost. So as
we get into the fall I would just expect that those prices to be up a couple of
dollars a ton over last year. Which is the trend we’ve seen over the last five
years. We’re continuing to see higher trucking prices. So I think we’ll
continue to see that again. We’re already seeing it in the potash market and in
the urea market as we move away from wholesale prices to retail prices. The
further you get away from those wholesale areas the higher those prices
get in a way that is related to transportation cost and much more severe
than it was in prior years. So we will continue to see that trend. Again I don’t
think a lot of these prices are extremely meaningful for most of our
growers. I’ve said this in the past. So 10% changes in price are not a concern.
They don’t change the math for what we should be doing or how we do it. And they
really don’t impact your bottom line and in a significant way. The exception to
that is potassium. So you can really save or spend a lot of money depending on how
good you are at timing your potassium purchases. So it’s at least worth
paying attention to. In terms of urea it’s more important to manage your
urea uptake efficiently, to minimize your use of urea, and to follow best practices.
That’s really how you’re gonna save money with most of your fertilizer
applications because we simply use far less than other commodities because it’s
a perennial crop. And most of our most of everything we’re growing is fruit and
most of what we remove in the fruit is potassium. So you know up 7%. Down 7%. 10%.
These are I think meaningful trends to pay attention to. They just will not
significantly impact your bottom line except for potassium. So I would
try to practice a wait-and-see approach unless I knew that I needed 600 pounds
of potassium this year and then maybe I’d pre-order half of it. Would be my
advice at this point. I don’t see any significant risk of waiting a couple
weeks to do that though because again we continue to see the wholesale market
decline in price and the retail market very stagnant. So that’s sort of the big
takeaway from this week’s update. If you have soil test questions and you need
recommendations our offices are available for that as well. I know not
everybody is going to have free time during harvest. It’s usually not
something we see any interest in until November. But I did want to touch on it
since it has been this year as we see harvest being extended because of the
larger crop and loads coming off more quickly because we’re getting more tons
per acre and the weather being as good as it is. So thank you for joining us
this week. If you have any other questions please let us know. You can
comment down below or contact us at our office. Thank you.

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