Fert prices?

Discussion in 'LESCO' started by all ferris, Jan 23, 2005.

  1. all ferris

    all ferris LawnSite Bronze Member
    Posts: 1,307

    Hey bob, I see that prices have went up. What is the reason for this and is it long term? You guys have great products and I use them religiously but I don't like to see prices go up. Any insight would be helpful.
     
  2. Bob West LESCO

    Bob West LESCO Sponsor
    Posts: 176

    First off, thanks so much for the support. We appreciate that.

    Fertilizer prices are going up for the vast majority of suppliers in 2005, and this is being driven by continuing price increases in the fertilizer raw materials costs.

    For example:
    • The cost of urea (the primary nitrogen source for fertilizer) has increased from $165 per ton last spring to more than $250 per ton today – a 45% increase;
    • The price of phosphorous has increased from $190 per ton to $210 per ton – a 10% increase;
    • The price of potassium has increased from $105 per ton to $140 per ton – a 33% increase.

    In sum, our costs increases will range from 8 to 12 percent for fertilizer products and 3 to 7 percent for combination products. For us to continue providing you the quality products and unmatched service that you count on from LESCO, we must raise our prices on these products by roughly the same percentage. We implemented these changes on Jan. 1, 2005.

    We understand that no one likes paying more for their purchases. The same is true for us. Unfortunately, the suppliers of N, P and K for fertilizer products have been selling more material to the international (China) markets lately, which has severely reduced available supply. We all know what diminishing supply does to pricing. In addition, escalating natural gas prices have driven the costs of these raw materials to record levels.

    As a result, we're stuck, and we're seeing other suppliers face the same challenges. And I think this is something we should expect to continue dealing with in the future.

    Bob
     
  3. jajwrigh

    jajwrigh LawnSite Bronze Member
    Male, from Martinsville, IN
    Posts: 1,405

    For the applicator this just means its time to increase prices to keep up with the inflation in our economy. Its unavoidable so just deal with it.
     
  4. Runner

    Runner LawnSite Fanatic
    Posts: 13,494

    Right. And just because the increases are between 33 and 45%, that doesn't mean that our total cost of business has to increase that much. While material costs are a substantial amount of our expenses, they are not the total. I think fuel prices this year are going to kick us where it counts as well.
     
  5. Scraper

    Scraper LawnSite Bronze Member
    Posts: 1,656

    I'm just hoping that after the winter season that diesel comes back down to last summer prices when it was cheaper than gas!
     
  6. jajwrigh

    jajwrigh LawnSite Bronze Member
    Male, from Martinsville, IN
    Posts: 1,405

    Damn those gas prices! All you guys who mow need to remember to add a fuel clause in your contracts to cover yourselves, come summertime!
     

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