Lock In 2012 Crop Inputs Now?

Lock In 2012 Crop Inputs Now?

2012 crop protectant and fertilizer prices likely to head higher.

With global markets hungering for shares of sky-high grain prices, it's safe to bet that tight supplies of fertilizer and crop protectant products are sure to come. And price hikes are sure to follow.

If you're fortunate enough to be banking cash overflows, consider pre-emptive tax-reducing action. Some manufacturers are already offering substantial discounts.

For example, growers have until Aug. 15, 2011 to receive $50 per gallon on purchases of Headline fungicide from authorized BASF retailers. Headline Advantage helps growers strengthen their opportunity to improve ROI with Headline fungicide," suggests Jason Ward, BASF's fungicides market manager.

Fertilizer is poised for price rises, according to the International Fertilizer Industry Association's outlook for 2011-14. The markets for the main nutrients – nitrogen, phosphorus and potassium – have fully recovered from the 2008-09 financial downturn, report Patrick Heffer, director of IFA's ag committee, and Michel Prud'homme, director of IFA's production and international trade committee.

The analysts expect new production sites to respond to an anticipated 11% growth in total demand by 2015. Strong crop prices are boosting fertilizer demand for all nutrients. World fertilizer demand is surpassing 2007-08 levels.

"In response to strong market fundamentals, world fertilizer demand is forecast to reach 191 million tons of nutrients in 2015-16," says Heffer. South Asia, East Asia and, to a lesser extent, Latin America would contribute to about 75% of anticipated growth in demand. The contribution of China to the increase in world N and P fertilizer demand is, however, declining in comparison to the previous decade.

So if you're planning to purchase fertilizer for 2012, plug tightening supplies of nitrogen and phosphorus into your projections. Again, locking in price and/or supply this fall may be worthy of consideration.

TAGS: USDA
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