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Urea costs give farmers an opportunity, if they can get it

A fertilizer expert says prices remain volatile, even though urea made a significant drop Tuesday.

Josh Linville is with StoneX. He tells Brownfield, “It broke through that really important 500 dollar a ton barrier. That was something we thought was going to be a sticking point. We thought, wow, this would be interesting to see. It broke right through it but then jumped right back up to $500 and I think it will stick there for a little bit, but I don’t think it’s going to be long-term.”

Linville is expecting the urea market prices to get higher moving forward. “In Q1 (quarter one), there’s a tremendous amount of global demand that steps up. You’ve got North America. You’ve got Brazil, India, and Europe. All of these countries need to start preparing for their spring season and so there’s a lot of demand that starts coming in.”

Linville tells Brownfield he’s also concerned about possible production cuts in China and Europe, but right now, demand is low and the opportunity is there if you can transport urea from New Orleans. “Urea is by far the cheapest form of nitrogen. It is cheaper than anhydrous. It is much cheaper than UAN, and I think a lot of farmers are sitting there scratching their heads saying why am I not taking a look at this urea and why am I not looking at saving tremendous amounts of money.”

Linville says if farmers can take delivery from a source who can transport urea out of New Orleans before the new year price increases, they could save nearly 40 dollars per acre in nitrogen costs at today’s prices.