Fertilizer Prices Drop, But Can Anyone Buy?

Markets may be starting to stabilize.

Urea continues to lead the way down for fertilizer prices in the U.S., with trade reports suggesting a deal at $300 a ton at the Gulf this week. That's a full $80 less than last week, and represents a decline of almost 60% from recent highs. However, there are signs the market may be starting to stabilize.

The collapse in global financial and grain markets has turned the frenzied fertilizer business into a buyers market, after a surge to record prices. Importers have found it harder to arrange credit and farmers have backed away from the market, uncertain about profit margins.

However, farmers trying to pencil out budgets for 2009 still face a guessing game. While international markets trade sharply lower, many dealers locked in supplies at much higher levels and may be unwilling to write down the price unless there's competition in a trade area.

Lack of immediate demand also makes price discovery difficult. To read Bryce Knorr's complete weekly fertilizer review, click HERE.

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