Farmers who wait until the last minute to make their fertilizer decisions this spring may not get the product they want, when they want it, says the president of a U. S. fertilizer importing and wholesale distribution company.
It won’t be a supply issue, as much as a handling and delivery issue, says Michael Stegmann, president of Lange-Stegmann Co. based in St. Louis, Missouri. He spoke at Farm Tech in Edmonton in late January.
“A farmer looking for urea for example, may have to take UAN or some other product, and if he wants the product Tuesday, he may not get until Friday or next week,” says Stegmann who is third generation of the family-owned business established in 1926. He is also president of the Lange-Stegmann subsidiary company Agrotain International.
While he suspects the Canadian situation may be similar to what is happening in the U. S., Stegmann says producers are holding back on cropping decisions and fertilizer purchases waiting until the last minute to see what markets will do.
“With fertilizer, we know prices have fallen dramatically in the last few months, and producers are waiting to see if those prices show up at the retail level,” he says. “And it just depends how long it takes to move inventory through the system. Many retailers bought their supplies a number of months ago, so some may be in a position to lower prices and others may not. I know of a couple of retailers who have gone to their farm customers to see if they could work out a price arrangement over a couple years.”
Stegmann says North American farmers likely won’t again see the extreme fertilizer price swings experienced in 2008, but he forecasts the market will remain volatile for several reasons.
“Fertilizer is part of a global market,” he says. “The price of fertilizer in St. Louis is influenced as much by what happens in China and Saudi Arabia and a dozen other countries. And too, governments are so much more involved in the fertilizer industry that it makes it hard to predict what markets will do.”
He notes that simply because of the number of producers and manufacturers, the fertilizer market will remain volatile. Potash isn’t too bad because there are 12 producing countries and of those, four countries produce 86 per cent of the potash for the world. With nitrogen, however, there are 60 producing countries around the world.