Fert prices

Discussion in 'Pesticide & Herbicide Application' started by DFW Area Landscaper, Dec 23, 2008.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    When I started my business in January of 2003, a quality bag of Lesco fertilizer was running around $10.50 per bag.

    Then the Lesco sales reps start pointing their fingers at natural gas prices. They burn natural gas to produce fertilizer.

    The price for a bag of Lesco fertlizer, I stopped buying from them in 2008, I think it peaked around 28 bucks last summer...and that's buying it several pallets at a time.

    Ok, so natural gas is about where it was before all this BS started. I spoke with my Lesco guy last week and he's saying fert prices are down about $3 a bag.

    WTF!!! Anyone know what we can expect to pay for fert this season? The chain stores (Home Depot/Lowes) were selling 50 pound bags of fert for about the same or even less than what I was paying to buy in bulk. The problem is, the chain stores don't have a bag that would work for me...it's either got iron (stains on concrete) or it's got broadleaf herbicide (kills client's pansies/flowers) or it's got too much phosphorus (promotes flowering on bermuda...ugly). I just don't understand why the chains stores can sell a 50 pound bag of stuff for less than what I pay to buy it on a commercial/bulk level.
     
  2. DUSTYCEDAR

    DUSTYCEDAR LawnSite Fanatic
    from PA
    Posts: 5,137

    just waite and shop around prices will fall
     
  3. tlg

    tlg LawnSite Senior Member
    Posts: 645

    The big box stores will take a loss on fert just to get customers in the store. The margin on the fert really means nothing to them. They make their money on all the other stuff you buy when you go in for that bag of fert. Believe me that $8.00 gas can you buy only cost them pennies. Lowe's used to sell a $99.00 lawn mower years ago. They only made a dollar on the thing. They knew that they would up sell the customer on all the other stuff they needed. things like , gas cans, oil, accessories etc...

    The fert being sold today was produced with materials bought when prices were up. Way up in fact. Don't expect prices to fall dramatically anytime soon. The market will dictate what happens. There is just a lot of supply out there that needs to move out first.
     
  4. LawnRunner

    LawnRunner LawnSite Member
    Posts: 37

    DFW,

    Since being in business I bought all my products from Lesco. This year when I did fall seedings the price on their 18-24-12 was about double what I paid in the previous year. This November I called to check the price on their 24-5-11 and it too was about double. I checked at Lowes and found 29-0-5 for less per bag and didn't have to make the 100 mile round trip to pick it up.
     
  5. bug-guy

    bug-guy LawnSite Senior Member
    Posts: 966


    they say mcdonalds makes very little on the burgers and other sandwiches
    but make a killing on fries and cokes
     
  6. mngrassguy

    mngrassguy LawnSite Silver Member
    Posts: 2,167

    I remember getting fert for $6.00/ bag in the late 80's
     
  7. meomypete

    meomypete LawnSite Member
    from TX
    Posts: 19

    We produce very little fertlizer in the US. Most is produce in Canada for P K and S. The Niitrogen and S comes from Iran, Russia, or other Oil produceng countries. There the Gas is less than $1 per MCF, in the US gas is now $3 to 5 and has been up to $12 last summer. My gas well roality is paying me 2.44 right now. It takes 33 MCF to produce one US ton of Ammonia. The gas is used to make hydrogen for the Ammonia. For them it is easier to ship ammonia or Urea than liquid NG. Now A 20 lbs bag has about $2 of materal. The rest is markup trans and labor to bag the final stuff. Ammonia at the gulf is $120 but the Suppliers bought large supplies at over $1,000 thinking it was going higher and need to pass this speculative purchase along or go broke like many other speculator in the last year.
     
    Last edited: Jan 16, 2009
  8. Runner

    Runner LawnSite Fanatic
    Posts: 13,496

    The thing is, is that the gas prices are not the largest factors in the prices of our fertilizers. It is the demand (global) that is doing it. It is the global demand for raw urea that is raising the prices. Most of which is going to countries such as India and China for corn...who are also jumping on the ethanol bandwagon.
     
  9. meomypete

    meomypete LawnSite Member
    from TX
    Posts: 19

    About the only fertlizer elements ethanol contains is Carbon, Oxygen, and hydrogen. The rest used to fertlize the corn is still used in food production. So really ethanol just uses the carbohydates from the corn and the others are recovered for use in feeds and other industrial feed stocks. Sulphur is used in ethanol production but is left over to be used again some where else. Speculation has made S expensive because it is a petro waste product that brings $25/ ton before it is burned to produce sulphuric acid to make other fertlizers, yet by the time it gets to the end user it is 25 to 100 cents a pound.
    Time will sort it all out except government is interfering and protecting those who are not productive enough to make wealth...its bailout time.
     
  10. Grassyknoll99

    Grassyknoll99 LawnSite Member
    Posts: 31

    I don't know how many distributors you have in your area. Try and call as many as you can. Prices here(Ohio P.a. ILL) have already dropped by almost half. 13-16 dollars a bag for 20-0-0 and higher.

    JDL(Lesco) has always used the Nat Gas excuse since I was buying in the late 80's. You have to remember, they are SALESMAN. They are told what to say by corporate to try and create demand. Talk to anybody that used to work there that no longer has ties with them. Their service has always been very good (very few exceptions). Each branch is different I'm sure depending on who you talk to.

    Prices are going down, the collapse in every commodity has changed things drastically in the last 6 months. Demand has dropped huge worldwide. Recession,500k job loss every month, overproduction, credit crunch, this is why prices have already fallen.

    Shop around and bargain hard, buy a little now if you are nervous.

    Good Luck
     

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