The markets provided many talking points for the latest edition of the Landus GROW Podcast featuring John King, Landus Optimization and Procurement Lead. Volatile fertilizer and chemical market activity made for a general downturn. According to John, that means it’s a great time to call our GROW Solutions Center to get your planting season started right.
GLOBAL IMPACT AFFECTS PRICING
The fertilizer market since the end of January has been trending down. We know that “high prices cure high prices.” The global market has made prices expensive for not only US farmers, but farmers around the world. When that happens, farmers ration demand. We saw soaring prices in Europe and on a global scale due to the Ukraine-Russia conflict. Europe had a low gas supply and which revealed the direction of the fertilizer market. While the suspended markets were looking into that situation, all of Europe had a mild winter that contributed to the high prices throughout the winter and into this year.
Last fall, nitrogen prices rose. Europe could not afford the growing natural gas prices and therefore purchased massive amounts of urea, UAN, and ammonia. That means the LNG market covers the rest of the demand. As a result, nitrogen prices have lowered.
After much waiting, India announced a few weeks ago that they’re starting to tender urea, but not as much as the market expected. Expect more upside than down in the next few weeks for urea. John stated that Landus and Iowa must be a big importer of urea, as we’re already behind the import/net supply due to low demand from retail or farmers. That impacts a US farmer reluctant to purchase nitrogen. Due to logistics, nitrogen prices offer little room for downside and should look to have a larger upside.
FALL FORECAST
Looking ahead, John expects downside in the market over the summer into fall. Europe will have lots of time to store up on their natural gas for next winter. The outlook: a bearish market for nitrogen products as we enter the summer. For pre-pay for spring of 2024, there’s favorable prices for prepay ammonia and UAN.
John talked about how the chemical goal at Landus is to have an empty inventory by the end of summer. He suggested that Landus farmer-owners position themselves to purchase crop protection products for spring 2024 during fall of 2023. A specific note made in the podcast was to inject some caution on the available supply of granular insecticides and specifically Aztec® products. The process to manufacture those products is complex and makes them few-and-far-between.
"Size your inventory for what you're going to need"
TAR SPOT DRIVES A TIGHT FUNGICIDE MARKET
The supply of premium fungicide continues to remain low due to the threat of tar spot. John advised that Landus farmer-owners review our extensive Tar Spot research and advice for more information and to secure fungicides as soon as possible before products are sold out.
INFRASTRUCTURE UPDATES – MITCHELLVILLE, RAKE, AND BOONE
The Farmer of the Future is well-equipped for 2023 with updated Landus locations. John shared that our Mitchellville and Rake facilities have undergone massive updates in 2022 and are nearing completion ahead of the 2023 planting season.
The Mitchellville chemical building is nearing completion. The 8,000-ton fertilizer building is constructed and has been operational since fall 2022. The liquid facility is the pivotal building in our transition at Mitchellville. From both a fertilizer and chemical standpoint, this 24/7 location is going to better service local farmers. Expect excellent consistency in products and efficiency along both bays.
A similar setting is being constructed in Rake, Iowa. Just north of our current Landus location, we are on track for a June 1 start date to offer the same services as the Mitchellville location.
John also shared some big news for Boone as the pack and manufacturing facility Landus building should be completed and operational by March of 2024. The blueprints show 400,000 gallons of bulk storage for chemical, 200,000 gallons of bulk storage for fertilizer, and a 25-ton liquid blender. This allows Landus to make tailored products for your unique farming operation. In addition, it will have over 75,000 square feet of storage space to house the bulk tanks and the blender. This facility is equipped to serve a five-state territory.
If you missed this episode of the GROW Podcast, listen here and don’t forget to subscribe.
Follow our social media accounts to see more updates on locations. Subscribe to our newsletters for daily market commentary. As always, give the GROW Solutions Center a call or text if you have any prep planting questions (515) 800-GROW (4769).
