Major fertilizer producers still expect a strong U. S. spring planting season, a development that would be a boon for the industry after a lacklustre fall.
Wet weather and a very late harvest kept many farmers from putting down fertilizer before snow fell this past fall and winter. That hurt fourth-quarter earnings in the fertilizer industry and dented stock prices.
“This spring we’re looking forward to a very strong season, ” said Stephen Wilson, chief executive of CF Industries, at the Reuters Food and Agriculture Summit in Chicago.
Grain analysts also told the Reuters Summit they were expecting U. S. farmers to plant more acres to corn this spring than a year ago.
Fertilizer prices fell at the end of 2009 as application rates dipped and demand fell due in part to the recession. Prices should slowly begin to rise this year as farmers replenish depleted stockpiles, Broadpoint AmTech analyst Edlain Rodriguez told Reuters.
“The spring season should be extremely strong for fertilizers, and we don’t see prices going down,” he said. “The bias is toward the upside in prices, especially where demand is strong and inventories for fertilizers are very lean.”
The U. S. Department of Agriculture projected 2010 corn seedings at 89 million acres and soybeans at 77 million, at its annual outlook forum in February. About 86.5 million acres of corn and 77. 5 million acres of soybeans were planted in 2009.
The USDA’s first estimate of U. S. corn and soybean seedings based on actual farmer surveys will be released on March 31.
“The fundamentals are set up… to motivate the farmer in the direction of planting corn, and the economics favour that,” CF’s Wilson said. “If we can get a little cooperation from the weather, that should help us realize our ambitions for the spring.”