Spring Fertilizer 2013 Outlook: More Of The Same

When it comes to crop inputs, there’s little denying that the whole of the 21st century has largely belonged to the fertilizer segment. With the exception of a brief pause during mid-2008, overall fertilizer sales for ag retailers have been at near-record highs year after year. In 2012, for example, ag retailers that comprised the CropLife 100 had $15.2 billion in fertilizer revenues, with the segment holding a solid 55% market share of all crop input sales.

Even more telling, these numbers could have been stronger if 2012 had cooperated, weather-wise. During the early part of the year, weather conditions seemed perfect for planting and spring fertility application work. Unfortunately, an extremely dry late spring turned into a bone-dry summer for much of the country. According to most ag retailers, this severely curtailed fertilizer applications.

“The full impact [of the drought] is very difficult to predict as some parts of our trade area have experienced severe crop loss while others have had much less,” said Doug Busdeker, senior manager, Northern farm centers for The Andersons, Inc., Maumee, OH, during a fall 2012 interview.

At the end of the year, U.S. corn production was off 13% to 272.4 million metric tons according to USDA — its lowest level since 2006-07.

Corn Is The Key

So with 2012 behind the industry, what is the early read on 2013? According to most market watchers, the answer is extremely positive. “Agricultural fundamentals have never been stronger,” said Jason Newton, head of market research for Agrium, speaking at The Fertilizer Institute’s Outlook & Technology Conference this past November. “Grower cash margins and income levels are at record highs.”

Of course, on the most basic level, corn is the key for fertilizer usage in the U.S. As commodity prices for this important cash crop have remained high during the past couple of years, the nation’s growers have steadily increased their planted acres accordingly. In 2012, 96.9 million acres were planted (although approximately 10 million of this total was lost during the drought).

In 2013, market watchers again expect a strong year for corn acreage. According to most models, corn acreage should again top 96 million acres, with soybeans and wheat also up. Only cotton is projected to see an acreage decline.

“Crop prices are good and 2013 acreage will be high,” said Rich Pottorff, chief economist for Doane Advisory Services at the TFI Outlook Conference. “Fertilizer demand should also be good.”

Among the three major fertilizer sectors, this projection means the most for nitrogen-based crop nutrients (N) such as anhydrous ammonia (NH3) and urea. In any given year, approximately half of the N used in the U.S. is applied to fields growing corn. Wheat comes in a distant second at 13% (although acreage projections also show wheat acres being up for 2013).

So in terms of N fertilizer usage in 2013, most analysts are projecting a modest increase across all segments. According to Arvin Pirness, manager, market research for PotashCorp, NH3 demand should show a slight increase from 17.2 million tons in 2012 to 17.3 million tons this year. Meanwhile, urea demand is expected to increase from 7.5 million tons in 2012 to 7.6 million tons in 2013. As for N solutions, these should grow from 13 million tons in 2012 to 13.1 million tons in 2013.

“Agriculture fundamentals are providing an optimistic backdrop for the upcoming fertilizer season,” says Pirness. “This is especially true when it comes to North American N demand.”

More P Mining

If there was one segment among the major fertilizer types that had the roughest time in 2012, it was phosphate (P). As Juan Von Gernet, senior consultant, phosphates for CRU Group, puts it: “The USA is a mature market with falling P demand.” Of course, this situation wasn’t helped much by the lingering nationwide drought across much of the country, which kept growers from applying new P to their fields instead of mining what might have already been there. With these factors working against it, the P segment saw its usage rates plunge from 5.6 million tons in 2011 to 5.2 million tons in 2012.

Despite this fact, Von Gernet is confident that P demand will begin a modest rebound during 2013. “The downward trend is likely to flatten in 2013 before recovering a year later,” he predicts. With this in mind, he projects that P demand in 2013 will increase 6% to 5.5 million tons by the end of the year.

A Long Way Back For K

For the final fertilizer macro-segment, potash (K), the past few years have been ones of recovery. In 2008, K consumption in the U.S. was at 4.2 million tons. However, critically high prices put an end to much of this demand and by the following year, with usage dropping 33% to 2.8 million tons.

Since this low point, K fortunes have steadily improved. By the end of 2010, the segment had recovered almost all of its lost demand, topping 4.1 million tons for the year. In 2011, K consumption topped 4.4 million tons — and it managed to increase another 0.1 tons in 2012 to 4.5 million tons.

But, according to Agrium’s Newton, 2013 will mark an end to this modest winning streak. “In 2013, I expect overall K consumption to be flat, driven by crop area and application rates,” he says.

As for why he expects this to be the case, Newton points to the after effects of the drought to continue to negatively impact K demand this year. “The most severely affected regions will likely reduce their application rates,” he says. “Furthermore, areas west of Central Illinois still require moisture.”

In addition, he adds, soil test results for K from 2012 in many areas of the country were not “significantly different than previous years.”

Yet, there are a few factors that might work into higher K demand from grower-customers during 2013. For one thing, there is an overall long-term trend of declining K levels in U.S. soils, magnified by increased silage (which equates to increased K uptake, according to Newton).

More encouragingly, Newton believes at least part of the U.S. will finally shake off the effects of the drought of 2012 as this past winter’s moisture figures are beginning to show. “There are signs of improved moisture in the Eastern Corn Belt,” he says.

Leave a Reply

Fertilizer Stories

Sulfur deficency in corn
Crop InputsManaging Sulfur Deficiency In Corn
January 6, 2017
Corn sulfur (S) deficiency is a growing problem in and across North Dakota, according to an article on the NDSU Read More
AFS Seed Retailer and Grower
Crop InputsThis Is Not Your Father’s World Of Nitrogen Management
January 6, 2017
Many of us older citizens can remember times when our fathers toiled day and night, to coax meager crop yields Read More
Young Corn Field
FertilizerPotassium Needs More Attention In Crop Nutrition
January 6, 2017
It’s well understood that plants require the right combination of the 14 essential mineral nutrients to sustain their growth, writes Read More
FertilizerSulfur: The 4th Major Nutrient
January 6, 2017
Sulfur is an essential nutrient in crop production. It is classified as a secondary element, along with Mg and Ca, Read More
Trending Articles
AgriSync
Matt Hopkins17 Agriculture Apps That Will Help You Farm Smarter In 2017
December 9, 2016
Ag professionals are working smarter, not harder, than ever before. Smart farming technologies have enabled them to reduce costs, maximize Read More
R4023 Sprayer, John Deere
CropLife 100Ag Retail Equipment Report: The Green Party Continues
December 7, 2016
In the annual race for sales in the ag retail equipment marketplace, the color schemes for participants are a little Read More
Mike Stern
Precision AgClimate Corp. CEO Talks Retailer Support For Digital Ag
December 1, 2016
CropLife Magazine’s sister publication, AgriBusiness Global, recently sat down with Mike Stern, CEO of The Climate Corp., following the Monsanto subsidiary’s Read More
Precision AgTrimble Debuts End-to-End FMIS Platform
November 28, 2016
October’s inaugural PrecisionAg Vision Conference left this author with many thoughts and things to ponder in the coming months. Probably Read More
CHS Primeland
CropLife 100The 2016 CropLife 100 Report: Reviewing The Many Bulls And Bears Impacting This Year’s Marketplace
November 28, 2016
For virtually all of 2016, the nation was wholly focused on the big Presidential election. Some folks aligned themselves with Read More
Monsanto sign
Crop InputsMissouri Governor Meets With Bayer CEO To Discuss Monsanto Merger
November 21, 2016
Missouri Gov. Jay Nixon visited Bayer AG global headquarters in Leverkusen, Germany, on November 18 to discuss the proposed Bayer-Monsanto Read More
Latest News
Andersons Retail Store
UncategorizedThe Andersons To Close All Retail Stores; Shutdown Does…
January 16, 2017
In a stunning announcement to the Toledo area, The Andersons Inc. said on Sunday that it would close its two Read More
Trimble TMX-2050 In-Cab Display
Eric SfiligojPrecision To Lead Agriculture In 2017?
January 16, 2017
Another new year is upon us! And I’m certain I speak for many in the agricultural world when I say Read More
Corn
Eric SfiligojThe Mood From Madison? In A Holding Pattern
January 16, 2017
Last week, I had the chance to attend the annual Wisconsin AgriBusiness Classic show in Madison, WI. It’s been a Read More
Syngenta Sign
Crop InputsAccenture Helps Syngenta Transform Its Global Logistics
January 13, 2017
Syngenta, a leading agriculture company, has collaborated with Accenture to design and implement a new digital logistics operating model across Read More
Fall Creek Seth Harden The Nature Conservancy
StewardshipLocal Farmers’ Watershed Initiative: Continuous Improve…
January 13, 2017
The goal in the Big Pine Watershed Project is to more intentionally do what local farmers and responsible ag retailers Read More
HerbicidesEPA Expands Enlist Duo Herbicide Registration To 34 Sta…
January 13, 2017
The U.S. EPA has expanded the geography for application of Enlist Duo herbicide from 15 to 34 states. This means Read More
Olson Ag Enterprise
CropLife 100Wilbur-Ellis Acquires Nebraska Seed Retailer
January 13, 2017
Wilbur-Ellis’ Agribusiness, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed and nutritional Read More
ManagementDeere-Precision Planting Update and the Ag Secretary Wa…
January 12, 2017
Editors Paul Schrimpf and Eric Sfiligoj provide the latest on the court date for John Deere/Precision Planting and the quest Read More
Monsanto sign
Seed/BiotechMonsanto, NRGene Form Agreement For Big Data Genomic An…
January 12, 2017
Monsanto Co. and NRGene have announced that the companies have reached a non-exclusive, multi-year global licensing agreement on NRGene’s genome-analysis Read More
AGCO Custom applicator
SprayersAGCO, Asmark Institute To Offer Training For Beginning …
January 11, 2017
AGCO Corp. and the Asmark Institute are collaborating to offer a new training program dedicated to educating and developing custom Read More
ManagementAg Land Values In Limbo In 2017
January 10, 2017
Several factors will come into play in 2017 that will determine the direction of land values. Randy Dickhut, senior vice Read More
Industry NewsPattison Agriculture Positioned To Be Leading Canadian …
January 10, 2017
Pattison Agriculture Limited (Pattison Agriculture), a division of The Jim Pattison Group (the Pattison Group), has announced the merger of Read More
Fertilizer Tender close-up
MicronutrientsHow Micronutrients Fit Into 2017 Fertility Plans
January 10, 2017
Where do micronutrients stand going forward in fertility plans? For one thing, Tim Mundorf, Field Representative with Midwest Laboratories, says Read More
Fertilizer application
State of the IndustryCautious Optimism On Fertilizer In 2017
January 10, 2017
What kind of fertilizer rates are growers and retailers looking at in 2017 and beyond? According to stakeholders CropLife magazine Read More
Asmus Farm Supply crop protection products in storage
State of the IndustryCrop Protection Products Market: Complexity Begets Oppo…
January 10, 2017
While other key market segments in agriculture continue to see tumultuous shifts in sales volumes going forward (large equipment sales are Read More
RoGator RG1300B AGCO
Sprayers10 Sprayers That Will Showcase The Latest Application T…
January 10, 2017
Sprayer manufacturers continue to step up their games with the latest in application technology. From direct injection systems and four-wheel Read More
Soybean Field
FungicidesGrowers Report Yield Boost, Extended Residual Disease C…
January 9, 2017
With the new growing season around the corner, it’s time to start thinking about inputs for 2017. As growers weigh Read More
Donald Trump
Eric SfiligojTrump’s New Ag Secretary Coming Soon?
January 9, 2017
As agricultural experts are quick to point out, incoming President Donald Trump largely has the nation’s growers to thank for Read More