The nitrogen market apparently has hit bottom, or at least come close, so lower prices for ammonia, urea or UAN solution are not expected. With depressed farm prices and subsequent reduced acreage, the industry has idled potential production of nearly 4 million tons of nitrogen. Thus, there's some potential for increased prices, although the overall market remains weak. Expect phosphate prices to be lower than what has been seen in the past few years. Phosphate producers are facing another year of reduced demand, and new capacity is coming online in key importing countries.
Prices depend largely on how well the industry can adjust production to meet demand.
U.S. consumption is flat, and there could be some downward pressure on prices because of a comparatively weak outlook for export sales. Expect the usual heavy demand for fertilizers in a short time period. This rise in fed-cattle prices, coupled with the continuing weakness in corn prices, has given feeder cattle prices a boost. What is especially encouraging is that beef has regained market share for the first time in 20 years. Demand has been better than expected.