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Fertilizers, Export Sales, Markets & Rain Days Update 5/27/22

Highlights


Tampa, Florida is a major fertilizer destination port for the USA. The June spot (cash) price in Tampa for ammonia nitrogen fertilizer settled at $1,000 per mt yesterday, a 30% drop from May's $1,425 per mt.


More and more buyers are unwilling to pay the record high prices that were seen in April and May. The cost of producing ammonia has dropped considerably as European natural gas prices have fallen since early April and are now pretty much equal to US natural gas prices, both are about the same as if crude oil was $150 per barrel. In other words, natural gas is still way over priced compared to other energy fuels.


In terms of percentage of the US Gross Domestic Product (value of all goods and services produced by a country’s economy), the cost of energy is estimated to be 5.8% of GDP and a bit more than half of the 9.2% of the early 1980’s financial crisis. The next peak was 6.6% in the Great Recession of 2008, when oil prices spiked to $147 per barrel. Current estimates are that energy expenditures in 2022 will be about 5.8% of GDP.


Norwegian nitrogen fertilizer producer, Yara International, expects fertilizer prices will remain high, noting the grains stuck in Black Sea ports must be replaced with more production and that will take a lot of nitrogen. They are telling everyone there will be famine. That sounds like a fertilizer salesman.


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