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

Potash Corp Agrium
Crop InputsAgrium, Potash Corp To Merge To Create $36 Billion Company
September 12, 2016
Canada’s Agrium Inc. and Potash Corp of Saskatchewan Inc. have agreed to combine in a deal that would create a Read More
FertilizerBRANDT Specialty Fertilizers Help Grower Set Soybean Yield Record
September 12, 2016
BRANDT, a leading agriculture retailer and manufacturer of specialty Ag products, has announced that its new proprietary nutrition products were Read More
Corn Field
FertilizerBridging Crop Nutrition Science And Technology
September 7, 2016
The future seemed to draw nearer for the 1,600-plus attendees of the co-located InfoAg and International Precision Agriculture conferences in St. Read More
Fertilizer Bin
FertilizerState Of The Fertilizer Industry Report Highlights Environmental, Social Contributions
September 6, 2016
As consumers, we live in a world with access to more data than we could ever hope to mine through. Read More
Trending Articles
Bayer Monsanto
Crop InputsBayer-Monsanto Mega-Merger: 6 Things You Need To Know
September 14, 2016
Mega mergers have become almost routine in the agricultural industry. Right on the heels of Monday’s news that fertilizer giants Potash Read More
Potash Corp Agrium
Crop InputsAgrium, Potash Corp To Merge To Create $36 Billion Company
September 12, 2016
Canada’s Agrium Inc. and Potash Corp of Saskatchewan Inc. have agreed to combine in a deal that would create a Read More
Osage Co-op Elevator Osage, IA Finished Building
OpinionAre We Crazy?
September 8, 2016
At some point in the first few months of my employment here at CropLife® magazine, I started getting curious about Read More
ManagementMAGIE 2016 Highlights and Deere Anti-Trust
September 1, 2016
CropLife Editor Eric Sfiligoj discusses the recent Midwest AG Industries Exposition and the Department of Justice’s objection to John Deere Read More
ASMARK 2016 Retailers Live! Tour - CPS
CropLife 100CPS Acquires Texas Retail Operation
August 23, 2016
Crop Production Services (CPS) has acquired the assets of Larry’s Chemical and Spray, Inc., for an undisclosed amount in an Read More
Key Cooperative Marcus Construction Steel Building
Retail FacilitiesMarcus Construction Builds High-Speed Agronomy Center For Key Cooperative
July 7, 2016
Key Cooperative in Grinnell, IA, wanted a state-of-the-art Agronomy Center to better serve its customers. Marcus Construction delivered exactly that. Read More
Latest News
Syngenta Seedcare Institute
Seed/BiotechSyngenta Opens New North America Seedcare Institute In …
September 23, 2016
Syngenta unveiled its new Seedcare Institute in Stanton, MN, during a recent grand opening celebration. More than 150 industry leaders, Read More
StewardshipMonsanto Invests $1.6 Million In System To Quantify Gre…
September 23, 2016
The USDA – Natural Resources Conservation Service (USDA-NRCS) recently awarded the National Corn Growers Association (NCGA) and its Soil Health Read More
Pipe rack
LegislationCourt Sides With Ag Retailers On PSM
September 23, 2016
The D.C. Court of Appeals has ruled the Occupational Safety and Health Administration violated the Occupational Safety and Health Act when Read More
ManagementPacific Coast Fertilizer Announces Interest In Longview…
September 22, 2016
Pacific Coast Fertilizer LP (PCF) announced at the Cowlitz Economic Development Council board of directors meeting its interest in developing Read More
Young corn plants in soil
UncategorizedCool Planet Raises Additional $9 Million To Commerciali…
September 22, 2016
Cool Planet has announced the first close of a new financing round to commercialize the company’s Cool Terra Engineered Biocarbon Read More
Crop InputsJim Loar Promoted To President And CEO Of Cool Planet
September 22, 2016
In a move that reflects and reinforces the company’s commitment to the agricultural market, the Cool Planet board of directors Read More
BlendersNorth Dakota Coop Debuts Dry Fertilizer Plant
September 22, 2016
North Central Grain Cooperative has begun operations at a new dry fertilizer plant at its Rolla, ND, site. It is Read More
Crop InputsMonsanto, Bayer Officials Defend Proposed $66 Billion M…
September 21, 2016
Top officials for Monsanto and Bayer defended their proposed $66 billion merger before skeptical senators on Tuesday, insisting that the Read More
ManagementUpcoming Shows & Recent Events
September 19, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about upcoming trade shows and events and review the Mid America CropLife Association Read More
Industry NewsVerdesian Life Sciences Appoints New CEO
September 19, 2016
Verdesian Life Sciences, a plant health and nutrition company, today announced that its board of directors has named Kenneth M. Avery Read More
Corn
Crop InputsEPA Settles With Syngenta For Alleged Multi-Regional Pe…
September 19, 2016
The U.S. EPA has announced a multi-region settlement with Syngenta Crop Protection, LLC (Syngenta) in Greensboro, NC, for alleged violations of Read More
ManagementMerger Mania
September 16, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss this week’s mega-ag mergers of Bayer and Monsanto and Potash and Agrium. Read More
Monsanto sign
Crop InputsMonsanto Ends Up Being A Bargain For Bayer
September 16, 2016
History will say Bayer got a bargain in its $66 billion purchase of Monsanto, writes David Nicklaus, St. Louis Post-Dispatch. The Read More
Greg Musson, Gar Tootelian
CropLife 100California Ag Retailer Steps Up To Feed Families Affect…
September 16, 2016
GAR Tootelian, Inc. (GAR) in Reedley, CA, is challenging the Central Valley to help raise enough money and provide 525,000 meals Read More
Crop InputsBayer, Monsanto CEOs Discuss Merger
September 15, 2016
Werner Baumann, Bayer CEO, and Hugh Grant, Monsanto CEO, discuss why they decided to merge their companies. Read More
Corn close up
Crop InputsNY Times: Bayer-Monsanto a Bad Deal for Farmers
September 15, 2016
Via NY Times: Don Halcomb, a 63-year-old farmer in Adairville, KY, is expecting his profit to vanish this year, largely Read More
Werner Baumann, Bayer AG, and Hugh Grant, Monsanto
Crop InputsBayer-Monsanto Merger Creates New Global Ag Giant
September 14, 2016
During the whole of 2016, many of the companies that do business in the agricultural industry have concluded the best Read More
Bayer Monsanto
Crop InputsBayer-Monsanto Mega-Merger: 6 Things You Need To Know
September 14, 2016
Mega mergers have become almost routine in the agricultural industry. Right on the heels of Monday’s news that fertilizer giants Potash Read More