CropLife: The Spring Fertilizer Outlook in Two Words? ‘Cautiously Optimistic’

In the February 21, 2022 edition of CropLife, Eric Sfiligoj writes about the spring fertilizer outlook and what growers can expect.  The article follows:

Whenever one is preparing an industry outlook article, two of the most overused words tend to be “cautiously” and “optimistic.” By their definitions, these two descriptors can cover a lot of ground when it comes to speculating on the annual “ups-and-downs” of any marketplace.

And truthfully, when looking at how the fertilizer category might perform this spring, the key industry drivers from 2021 seem to point to some stronger-than-average potential. According to the 2021 CropLife 100 survey, the nation’s top ag retailers saw their crop nutrition revenues grow to $15.3 billion. This represented an impressive 19% increase over the 2020 fertilizer category sales figure of $12.9 billion.

Likely tied to this sales growth was the fact that U.S. growers made a lot of money last year. According to USDA’s Economic Research Service, U.S. net farm income increased by $18.4 billion from 2020, topping $116.8 billion in 2021.

Put together, these two factors seem to make the word “optimistic” a given for the 2022 spring fertilizer outlook. However, when prices come into play, the word “cautiously” rears its ugly head. For example, grower-customers were paying an average of between $300 and $400 per ton for anhydrous ammonia for the fall 2020 application season. But by the end of 2021, this amount had ballooned to between $1,000 and $1,200 per ton. Other key macronutrient prices at year’s end included $885 per ton for monoammonium phosphate (MAP), $815 per ton for diammonium phosphate (DAP), and $775 per ton for potash.

The Outlook for 2022

So, with all these variables tossed into the mix, what is the 2022 spring outlook for the fertilizer category? According to George Secor, President/CEO for Sunrise Cooperative, Fremont, OH, things look somewhat positive.

“Sunrise is fairly optimistic for the 2022 crop year,” says Secor. “We set ourselves up with a nice start to the fall season, selling quite a few tons back in May and June of 2021 for the fall application. In late December 2021, the corn price was $5.50 and Soybean price was $12.75. These values give us good optimism for fertilizer prices, as with traditional yields and these prices, most growers will generate roughly $300 per acre, [giving them] more gross dollars growing corn over soybeans. It will not take $300 per acre more to grow corn than soybeans. Therefore, corn acres should be strong throughout our trade territory. As we all know, strong corn plantings will be good news for fertilizer applications.”

Still, he does add a note a caution to his outlook. “So, although I am positive for fertilizer application, I believe we will have enough price headwinds that it will not be a record year or anything like that,” says Secor.

You can read the full article at: https://www.croplife.com/crop-inputs/fertilizer/the-spring-fertilizer-outlook-in-two-words-cautiously-optimistic/