DTN Retail Fertilizer Trends

By Russ Quinn
DTN Staff Reporter

OMAHA (DTN) -- Retail fertilizer prices are shifting modestly lower for the 2016 crop, according to dealers tracked by DTN for the first week of October 2015. But liability issues and proposed government safety regulations threaten the retail fertilizer business and prices, long-term.

As was the case in last week's price survey, only one fertilizer declined by an amount of any consequence. Potash prices slipped 5% compared to last month with an average price of $446/ton. This is now the lowest average potash price in the history of the DTN retail fertilizer price reporting, which began in November 2008.

Prices for the remaining seven major fertilizers edged lower compared to a month prior, but none were down an amount of any importance in the near term.

DAP averaged $548/ton, MAP $564/ton, urea $418/ton, 10-34-0 $584/ton, anhydrous $639/ton, UAN28 $294/ton and UAN32 $338/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.45/lb.N, anhydrous $0.39/lb.N, UAN28 $0.53/lb.N and UAN32 $0.53/lb.N.

With retail fertilizer moving lower in recent weeks, only one fertilizer is now higher compared to a year earlier. 10-34-0 remains 5% higher compared to last year at this time.

The remaining seven nutrients are now lower compared to retail prices from a year ago. Both DAP and MAP have fallen 6%, potash 7%, anhydrous 8%, UAN32 9%, UAN28 10% and urea 18% during this period.

AFTERSHOCKS FROM WEST, TEXAS

Longer term, fertilizer retailers across the country could be facing stiffer OSHA rules and increased costs from liability exposure. Changes to safety regulations are set to take effect at the end of the calendar year, short of a legal challenge by the Agricultural Retailers Association (ARA), The Fertilizer Institute (TFI) and several fertilizer retailers. As DTN reported last week, North Dakota's ag commissioner estimates a third of the state's fertilizer retailers could fold because of the cost of compliance. (See DTN's report on OSHA regulations here http://goo.gl/… ).

Many in the fertilizer industry believe OSHA decided to strengthen safety rules for fertilizer retailers to comply with an Executive Order by President Barack Obama after the deadly West, Texas, fertilizer explosion that killed 15 and leveled part of the town.

These added regulations focus on anhydrous ammonia, not ammonium nitrate, which caused the explosion in West, and could cause some fertilizer retailers, especially smaller ones, to stop selling the nitrogen fertilizer. Retailers would be subject to added costs of improving facilities as well as possible higher insurance costs.

Separately, a settlement was reached Monday with the families of the some victims of the West, Texas, facility explosion, according to the Associated Press.

Jury selection for the trial had been scheduled to start on Monday but a county website told potential jurors they were excused because "a settlement has been reached." No other details of the settlement were reported by AP.

District Court Judge Jim Meyer divided a host of lawsuits into three groups. The trial Monday was for the first group representing relatives of three men killed in the blast.

They sued the local owners of the facility as well as companies which either manufactured or sold fertilizer to the local company. The owners of the West Fertilizer Co. had $1 million in liability coverage, but the damage from the explosion exceeded $200 million.

The blast on April 17, 2013, also injured hundreds, demolished a whole section of the town and left a crater 90 feet wide and ten feet deep. Most of the victims were first responders who arrived to fight the fire but some nearby residents also were killed.

Authorities from the Texas State Fire Marshals' Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) never determined how the fire started.

DTN collects roughly 1,700 retail fertilizer bids from 310 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN Pro Grains subscribers can find current retail fertilizer price in the DTN Fertilizer Index on the Fertilizer page under Farm Business.

Retail fertilizer charts dating back to November 2008 are available in the DTN fertilizer segment. The charts included cost of N/lb., DAP, MAP, potash, urea, 10-34-0, anhydrous, UAN28 and UAN32.

DTN's average of retail fertilizer prices from a month earlier ($ per ton):

Russ Quinn can be reached at [email protected]

Follow him on Twitter @RussQuinnDTN

(MZT/CZ)

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