US fertilizer consumption to rise with acreage
US fertilizer consumption this year will be the highest in over a decade as farmers are set to plant 94mn acres of corn and 85mn acres of soybeans.
Nitrogen consumption should be 4pc higher than last year at 8.83mn st N across corn, soybean, wheat and cotton, Argus estimates. Phosphates consumption would rise by 5pc to 4.19mn st P2O5, potash by 6pc to 4.32mn st K2O and sulfur up by 4pc to 392,000st S.
In remarks at a conference yesterday, US Department of Agriculture chief economist Robert Johansson said that US corn acreage would rise to 94mn acres — toward the upper end of previous industry estimates — as forward prices and the corn:soybean price ratio are favorable to corn. Last year farmers planted just under 90mn acres of corn as flooding and inclement weather prevented fieldwork.
But Johansson also noted that the price ratio was not even, with basis in the Dakotas favoring soybean but eastern Corn Belt and southeast prices favoring corn.
A distributor in North Dakota said today that farmers, uneasy over the export potential for soybeans, would look at more than just the price signal when making planting decisions.
Northern Plains markets are a key consumer of urea, while farmers in the eastern Corn Belt use more UAN.
Spring wheat planting is likely to be lower than last year's 12.7mn acres, USDA estimates, as saturated Northern Plains soils will lead farmers to plant alternative crops.
Winter wheat plantings are estimated to have shrunk again to 30.8mn acres, still the second-lowest in over 100 years, as planting conditions and switching to cotton reduced Kansas and Oklahoma seedings.
Soybean area will climb by 12pc to 85mn acres, though this is more of a return to trend after weather conditions prevented several million acres from being planted last spring.
Rice area will climb by 21pc to 3.1mn acres, the highest since 2016, as farmers across the South increase area in response to higher prices.
US fertilizer prices sank through the fall of 2019 as poor weather restricted fertilizer applications, limiting wholesale trade as retailers retained high stocks. Spring applications should finish rebalancing the market, if weather and river conditions allow.
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