Most nitrogen fertilizers likely are in place for the 2022 spring crop season in North America, albeit at much higher prices. However, the continuing Ukraine-Russia war can limit fertilizer supplies for the crops that will be planted in South America later in 2022, leading to further price pushes for fertilizer used in North America for 2023.
The analysis comes from a University of Illinois and Ohio State University study published in the Illinois Farmdocdaily.
DATA ON INTERNATIONAL NITROGEN TRADE
The Food and Agriculture Organization of the United Nations maintains a database of the use, production and trade of the three major fertilizer nutrients: nitrogen, phosphate, and potash.
The latest data available show that in 2019:
- China used 26.74 million tonnes of nitrogen, while it produced 32.40 million. China’s production was 121% of use. Exports from China were estimated at 5.98 million tonnes, imports at 0.32 million tonnes, giving net exports of 5.66 million tonnes. China is the largest user and producer of nitrogen by wide margins. China is the second-largest net exporter of nitrogen.
- India used 18.86 million tonnes and produced 13.72 million tonnes of nitrogen. Net exports equal -6.45 million tons, making India the largest importer of nitrogen fertilizers.
- The US used 11.67 million tonnes of nitrogen fertilizer and produced 13.26 million. Net exports were -2.46 million tons, indicating the US was an net nitrogen importer. The FAO reported agricultural use at a lower value than that given in the Mineral Commodity Summary 2021 publication by the US Geographical Survey, another source of nitrogen statistics for the US. The USGS and FAO have the US importing nitrogen. Differences between the two sources likely deal with definitions and the fact that USGS imputes agricultural use.
- Brazil used 4.91 million tonnes and produced 0.36 million. Net exports of Brazil are -4.84 million tons. Brazil only produces 7% of its nitrogen fertilizer.
UKRAINE WAR VS NITROGEN TRADE
The Ukraine-Russia war could have significant effects on global nitrogen fertilizer trade, the report said. Fertilizer exports from Russia could be reduced, either by direct disruptions to the physical flow of goods or sanctions on Russian exports by trade partners.
How much of a reduction this will create remains to be seen, the report said, but given Russia’s 21% share of exports, significant reductions would be difficult for other major exporters to offset.
Alternatively, some countries could ban Russian fertilizer imports while others do not, causing substantial changes in nitrogen flows worldwide, the report said. In either case, nitrogen fertilizer prices would increase, with explosive increases more likely as Russian exports are crimped.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $139.77 to $147.00 per cwt, compared with last week’s range of $141.47 to $143.77. FOB dressed steers, and heifers went for $219.04 to $223.13 per cwt, versus $217.03 to $221.89.
The USDA choice cutout Thursday was up $0.69 per cwt at $262.60, while select was off $1.26 at $251.06. The choice/select spread widened to $11.54 from $9.59 with 139 loads of fabricated product and 28 loads of trimmings and grinds sold into the spot market.
The USDA reported that basis bids for corn from feeders in the Southern Plains were unchanged at $1.50 to $1.60 a bushel over the May futures and for southwest Kansas were unchanged at $0.10 over May, which settled at $8.16 a bushel, up $0.00 1/2.
Ten heifer and 15 steer contracts were tendered for delivery Thursday.
The CME Feeder Cattle Index for the seven days ended Wednesday was $156.36 per cwt up $0.15. This compares with Thursday’s Apr contract settlement of $155.92, down $0.27, and May’s $157.95, up $0.60.