Farmer Comment On High Fertilizer Price

http://www.fcc-fac.ca/newsletters/en/express/articles/20070223_e.asp#0

This post pretty much sums up what has happened in fertilizer price this year. Mainly that price has gone up since fall. When I use to be the lead salesman in fertilizer we always said you would save 10% on ave by buying in fall. Some years you save a lot more, I have seen 30%, and about once every 10 or so you lose.

I just want to throw in my two cents worth:

• Mike is right a lot of key customers are taken care of. But from what I hear producers are having to hit two or three retails to secure supply. That could mean retails are short or retails are keeping 25 to 30% of supply for spring to capture the market gain.
• Second point, the article talks about 50% price difference. Quoted price now is a "false" price. There is no demand or competition now in western Canada for the product. You can call the price anything and get away with it. I heard an interesting "early warning" signal some industry people are using. My understanding is planting in the cotton belt starts at the end of the month. People are watching how much corn goes in. Depending on how much cotton land switches to corn it could give an early read on demand and consequently on price
• Retail dealers usually get a chance to "buy" stored product from wholesalers, much like the producer does from retails. This year the "buy" did not happen till late and price was high.
  
  We can use this a an indicator of spring price. This "virtual" buy often gives the retails about 5% discount from where spring price will be.
• Demand driven markets are expensive. If, as it looks, fertilizer is driven by corn acres and to a lesser extend canola in western Canada, LOOK OUT, price will be scary.
  
  I really like this newsletter/blog from FCC. Good current pieces