CF Industries: Inside Look At The Nitrogen Fertilizer Market

In January, CropLife conducted a short Q&A with Bert Frost, senior vice president, sales and market development for CF Industries on the state of the nitrogen (N) fertilizer marketplace. Here is what he had to say:

What were the key market dynamics for N fertilizers in 2012?

Strong global demand made 2012 an excellent year for the N fertilizer market. Acres planted were high around the world and prices for many crops reached record highs, even before the impact of droughts in areas such as the U.S. and former Soviet Union countries became clear. On the supply side, the political disruption, construction project delays and natural gas availability resulted in production issues primarily in North Africa. Natural gas supplies were tight in Trinidad, limiting production from a key North American supply region. In addition, a high volume of Chinese exports was offset by high demand into India. These resulted in a relatively tight market which supported N fertilizer prices throughout the year.

What notable trends did you see in the N market during the fall 2012 application season?

In North America, the corn and soybean harvest occurred one to three weeks early and weather was conducive to fall fertilizer application. The result was an early fertilizer season and strong fall N demand. In the U.S. N market, we saw high imports, especially for urea, in order to meet the strong demand. Chinese exports during the fall were above expectations. However, this mostly offset production issues in other places around the world such as Algeria, Egypt, Trinidad, Pakistan and Bangladesh.

What is your outlook for the North American crop nutrient supplier industry — particularly for N fertilizers — in spring 2013?

We expect strong nitrogen fertilizer demand to continue due to high corn plantings, which could exceed last year’s high level of close to 97 million acres. However, we see two significant challenges for the spring. The first issue is logistics, as record low water levels on the Mississippi River will challenge product shipments in particular for imports coming from the Gulf. The second issue is low inventories for many products — most especially ammonia. Tight supplies could limit ammonia sales in the spring and result in some demand shift towards UAN and urea.

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