Fert Prices: Decided not to buy fertilizer early

Discussion in 'Pesticide & Herbicide Application' started by lawnlandscape, Dec 7, 2010.

  1. lawnlandscape

    lawnlandscape LawnSite Senior Member
    from Midwest
    Posts: 780

    With all the hype about fertilizer prices going through the roof I was strongly considering ordering everything I would need for 2011 in now. In previous years we would order the amount we needed right before each application.

    After spending the past 2 days researching the corn futures, analyzing the market, and speaking to different suppliers I have decided NOT to buy my fertilizers early. Don't quote me on this, because I am not an expert at all, but based on my own personal research, I would expect the price of corn to remain about the same as it is now until spring.

    My supplier did tell me that if I did want to buy now, he would write terms so the payment would not be due until May 15th 2011. But, corn is higher then it normally is already, and will be kicking myself if it goes down and I had to store it all winter and also pay more.

    If it goes up another 10%, I will reconsider ordering early, but I just don't see it going up $2-$3 a bag by spring.

    What does everyone else honestly think?
     
  2. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,051

    lawnlandscape,

    Here we go....I promise I will be nice! :)

    You can research corn futures all you want and you won't learn a thing. We are in uncharted waters right now and nobody can predict the market. This summer they were calling for $2.80 corn...and low and behold we had a short crop and it is now $5.60. They are saying possible $7 corn this spring.

    The other player in the market is the funds. Grain markets used to be controlled by weather and usage...and not it is controlled by the funds markets and they will ride the market up and then cash out. That is why there is so much volatility in the market now.

    Five years ago it would move a nickel of dime a day...and now it will move $.50 in 10 minutes.

    Nobody knows so I wouldn't delay my fert purchase due to your research.

    I have farmed my whole life and I am so confused right now. I sold most of my corn for $4 and thought I was living high on the hog!



    1) Fertilizer market almost as strong right now as it has ever been
    2) Predictions are fert will continue to increase
    3) Yes corn is a MAJOR player...outside the US is also a MAJOR player
    4) Corn crop was short this year (big reason for large increase in market price)
    5) We will not have another corn harvest until Oct of 2011 (means corn price will stay high until atleast June if not later)
    6) We import a lot of fertilizer and they are not sending it to us

    Fertilizer suppliers can not even get 0-0-60 right now. They literally can't even buy it!

    You can do what you want...but I wouldn't base it on the FUTURES market.
    Here are the facts: This country is short on corn and prices will go up and down from here on out, but they will not drop much unless demand drops.

    The demand for corn right now is through the roof.

    Hope that helps!

    RC
     
  3. Shegardi

    Shegardi LawnSite Member
    from Ohio
    Posts: 198

  4. fl-landscapes

    fl-landscapes LawnSite Silver Member
    Posts: 2,542

    I was wondering if you would take the bait.....when I read the title and who it was from I thought to myself the thread tiltle should be "hey rceech I disagree with what you did regarding pre-purchase of ferts...now lets argue for another two days":laugh::laugh:
     
  5. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,051

    LOL

    I didn't take it that way.

    Maybe I am wrong...but I don't think he is trying to start anything.

    I just think he is using the wrong model to make his decision. Looking at corn futures doesn't mean a thing. It is all about supply and demand of both commodity crops AND fertilizer.

    If I knew what the grain market (or anyone for that matter) was going to do in 6 months I would be sitting on a beach right now smoking a cigar.

    Looking at the shortage on corn, other countries now eating meat and not being able to get fert like we used to...the writing is on the wall IMO!
     
  6. RABBITMAN11

    RABBITMAN11 LawnSite Bronze Member
    Posts: 1,373

    Im glad i have mine tied up.
    Posted via Mobile Device
     
  7. jasontimm

    jasontimm LawnSite Senior Member
    from MN
    Posts: 362

    Ya, regardless, history shows that input costs always skyrocket the following year after high market prices on crops, fact being fert prices now are guaranteed to be lower than in a couple of weeks, and even 6 months from now, its just how it is.
     
  8. lawnlandscape

    lawnlandscape LawnSite Senior Member
    from Midwest
    Posts: 780

    Thanks for the in-site. That was all very good. Now you got me thinking again... I read somewhere that the government just made it so gas will not have 15% ethanol instead of 10% as well. Do you know anything about that? Including if its true or not?
     
  9. lawnlandscape

    lawnlandscape LawnSite Senior Member
    from Midwest
    Posts: 780

    seriously.... grow up..
     
  10. lawnlandscape

    lawnlandscape LawnSite Senior Member
    from Midwest
    Posts: 780

    If you had a crystal ball snowing fert prices over the next year, what do you think is going to happen to a $15 (which is where its at for me today) bag of 20-0-04 over the next year?

    You may not want to answer this... but for the record... I'm not going to hold you to it, if you did want to predict something. :)

    You are clearly a lot more educated in this regard then I am.
     

Share This Page