Fertilizer: A Year At The Top

When historians look back at 2008, they are likely to view it as the absolute best of times for the fertilizer marketplace. Of course, the question now is will this year be a continuation of the good times that started in 2007 or the industry’s last peak before dropping back into a valley of question marks?

There’s little denying that 2008 was a really great year for the fertilizer market. As Rich Pottorff, chief economist for Doane Advisory Services, said at the recent Fertilizer Outlook and Technology Conference: “It’s been an amazing year for virtually everyone in agriculture, from the suppliers to dealers to end-users. Everyone’s been making money, especially those companies dealing in fertilizer.”

CropLife 100 retailers obviously agree with this assessment. According to figures compiled in the 2008 survey, CropLife 100 dealerships and cooperatives sold over $9.5 billion in fertilizer inputs during the year, up 30% from the 2007 total of $6.7 billion. Fertilizer now represents 50% of all crop input/services sales within the marketplace, up 4% from 2007, and 16% higher than the next CropLife 100 category, crop protection products.

The reason that fertilizer has enjoyed such good times, economically, is the perfect blend of more corn acreage hitting the marketplace at a time when commodity prices have hit near record levels. During much of 2007, the nation’s growers quickly jumped on the alternative fuel bandwagon, planting an additional 12 million acres of corn to feed the country’s growing demand for ethanol. Consequently, this 96 million acres of corn ate up a lot of macronutrients, especially nitrogen-based fertilizers and potash (K).

As the industry charged into 2008, some growers cut back on their corn acreage, down approximately 10 million acres. However, as growers looked to cash in on the bull market for corn among buyers (with prices ranging from $5 to $7 per bushel for much of the year), many boosted or increased their fertilizer consumption to keep their yields high. This kept the 2008 market for fertilizer strong. Of course, in terms of dollars, it didn’t hurt that fertilizer prices also climbed, generating more revenue along the way for suppliers and distributors.

Moving Forward

But will this continue? According to Pottorff, the need for more corn to feed global and domestic demand is not going away. To just maintain the world’s current carryover stocks, he estimates that U.S. growers will have to plant around 89 million acres of corn in 2009 and 93 million acres in 2010. Based upon this, the demand for fertilizer should stay strong for years to come.

But it might not play out this way. “For this to happen, the economics will have to be there, and they are not there right now,” he said. “For growers to make a profit on corn in the marketplace, they will have to get around $4 per bushel. Right now in mid-November 2008, corn is selling for approximately $3.50 per bushel. This could push more growers into higher commodity priced crops such as soybeans or wheat instead of putting their time and money into more corn.”

When the 2008 survey asked retailers what they expected their grower-customers to plant in 2009, 61% said that they thought there would be more corn. Another 61% thought more soybeans and less corn would be in the cards. Ten percent expected corn acreage to grow more than 10%; 25% thought acreage would be flat; and 15% thought corn would decline.

For soybeans, the numbers were similar. Twenty-seven percent thought they would have more than a 10% increase in soybean planting, 25% thought the market would be flat, and 2% thought there would be a more than 10% drop in soybean acres.

The only agreement was in cotton. Here, virtually every CropLife 100 retailer thought the marketplace would see fewer cotton acres. This was borne out by Pottorff’s projections, which pegged cotton production in 2009 at 9.1 million acres, down 300,000 acres from the 2008 total.

Leave a Reply

Fertilizer Stories

FertilizerKoch Agronomic Services Launches N-TEGRATION Technology
July 27, 2015
Koch Agronomic Services, LLC (KAS) has launched  N-TEGRATION Technology, a process technology platform designed to enable production of enhanced efficiency fertilizers at Read More
FertilizerWSJ: Cf Industries Exploring Merger With Dutch Chemical Company
July 23, 2015
U.S. fertilizer maker CF Industries is in advanced merger talks with Amsterdam-listed chemical company OCI NV, the Wall Street Journal Read More
Crop InputsH.J. Baker Launches Fall Sulphur Campaign
July 22, 2015
H.J. Baker has launched their “Keep Your Future Green – Use Tiger This Fall and Win Big” campaign. The campaign Read More
FertilizerNew Research Could Lead To Less Reliance On Nitrogen, Eliminate Runoff
July 21, 2015
Farmers often are required to apply nitrogen fertilizers to their crops to maintain quality and improve yields. Worldwide, farmers used Read More
Top 100 Articles
CropLife 100Allied Ag Distributors Adds Four New Owners
July 30, 2015
Aligned Ag Distributors LLC has announced the addition of four new customer/owners to Franklin Holding Co. LLC. They are: The Read More
CropLife 100Pinnacle Purchases California-Based Specialty Crops Retailer
July 20, 2015
Pinnacle Agriculture Holdings has successfully acquired California-based NH3 Service Co.  Operating as part of Pinnacle’s Performance Agriculture brand, the new locations Read More
Asmus Farm Supply liquid fertilizer facility features 20,000 square feet
CropLife 100Slideshow: Asmus Farm Supply Shows Off Its New Liquid Fertilizer Facility
July 15, 2015
Asmus Farm Supply, Rake, IA, recently added a new liquid fertilizer facility to its company operations. The new liquid fertilizer Read More
CropLife 100Wilbur-Ellis Feed Division Facilities Receive Safe Feed/Safe Food Certification
July 13, 2015
Wilbur-Ellis Co.’s Feed Division, a marketer and distributor of value-added feed ingredients for the aquaculture, livestock and pet food industries Read More
CropLife 100BRANDT Expands To Brazil With Acquisition
July 8, 2015
BRANDT has acquired a majority interest in Target Brasil Fertilizantes Ltda. through its Brazilian subsidiary. Target Brasil manufactures, distributes and Read More
Milan Kucerak, president/CEO, West Central
CropLife 100West Central Cooperative And Its New President Are A Match Made In Deviation
June 29, 2015
To appreciate just how unique West Central Cooperative is in the world of ag retail, an observer need only consider Read More
Latest News
CropLife 100Allied Ag Distributors Adds Four New Owners
July 30, 2015
Aligned Ag Distributors LLC has announced the addition of four new customer/owners to Franklin Holding Co. LLC. They are: The Read More
FungicidesReport: Sudden Death Syndrome Symptoms Appearing In Soy…
July 30, 2015
Last week, symptoms of sudden death syndrome (SDS) began to appear in April 15-planted soybeans at the University of Illinois’s Read More
Seed/BiotechAdvanta Seeds Adds New Phoenix Corn Hybrids
July 30, 2015
Corn growers in the High Plains and Western states have new options available for the 2016 growing season from Advanta Read More
ManagementTechnology and agriculture: a Futurist’s Perspective
July 30, 2015
Futurist David Zach, speaking at this week’s InfoAg Conference in St. Louis, shared thoughts on the benefits and limitations of Read More
Biofuels Plant in Lousiana
Industry NewsIdle Biofuels Plant In Louisiana To Reopen As Ammonia F…
July 30, 2015
A Lithuania-based company plans to spend $265 million to reopen an idle biofuels refinery in Grant Parish as an ammonia Read More
FFA at Monsanto Booth at the 2015 National Farm Machinery Show
Industry NewsFive Students Receive The 2015 Monty’s Plant Food Compa…
July 29, 2015
This fall, five college-bound students will have financial support through the Monty’s Plant Food Company FFA Scholarship. All five scholarship Read More
GYPSOIL Blendable Pellets
Crop InputsBeneficial Reuse Management Launches Pelletized Gypsum …
July 29, 2015
Beneficial Reuse Management (BRM) announced this week at Ag Media Summit that its GYPSOIL Pelletized Products Division will open a Read More
StewardshipOhio Water Quality Project To Determine How Much Phosph…
July 27, 2015
Researchers with the College of Food, Agricultural, and Environmental Sciences at The Ohio State University are looking for farmers in Read More
FertilizerKoch Agronomic Services Launches N-TEGRATION Technology
July 27, 2015
Koch Agronomic Services, LLC (KAS) has launched  N-TEGRATION Technology, a process technology platform designed to enable production of enhanced efficiency fertilizers at Read More
HerbicidesExpert: IARC Herbicide Classifications Leading To Confu…
July 24, 2015
Few people in the crop protection industry had heard of the International Agency for Research on Cancer (IARC) before this Read More
ManagementFCI Trade Summit Update & Precision Tank Turns 50
July 23, 2015
Editors Dave Frabotta and Eric Sfiligoj discuss the upcoming FCI Trade Summit in Las Vegas, NV, and how Precision Tank Read More
Palmer pigweed seedhead in cotton
HerbicidesUSDA Deregulates Dow AgroSciences’ Enlist Cotton Trait
July 23, 2015
The USDA today issued its decision deregulating Dow AgroSciences’ Enlist cotton trait in the U.S. The USDA has now completed its Read More
Industry NewsVerdesian Life Sciences Showcases Versatile Product Por…
July 23, 2015
Technology has revolutionized agriculture by bringing farmers, retailers and distributors to the forefront of the digital age. To meet the Read More
FertilizerWSJ: Cf Industries Exploring Merger With Dutch Chemical…
July 23, 2015
U.S. fertilizer maker CF Industries is in advanced merger talks with Amsterdam-listed chemical company OCI NV, the Wall Street Journal Read More
HerbicidesNufarm Releases New Panther SC Herbicide
July 23, 2015
Nufarm has announced the availability of new Panther SC herbicide. Panther SC is the first liquid formulation of flumioxazin available Read More
EquipmentFarmLink Launches Farm Equipment Sharing Program
July 23, 2015
FarmLink has introduced a new online farm equipment sharing community – MachineryLink Sharing – leveraging this new economy business model Read More
HerbicidesCould The South’s Most Troublesome Weed Represent A Thr…
July 22, 2015
Palmer amaranth is undoubtedly the most troublesome weed in the southern United States, taking a devastating toll on both cotton Read More
Industry NewsH.J. Baker Hires New Director Of International Sales
July 22, 2015
Global Agriculture firm H.J. Baker announced today that Steve Langley has joined the company’s Crop Performance Division and Animal Health Read More