 "Difficulties within the financial sector became apparent last
fall. The financial meltdown, along with public perceptions of
economic problems, has led to concerns that a deep, worldwide
recession is occurring," said Gary Schnitkey. "As a result,
prices of many commodities have declined dramatically in the
belief that demands for those commodities are being reduced.
"Among those commodities seeing declines are wholesale
fertilizer prices."
Schnitkey's report,
"Fertilizer Prices Likely to Decline in 2009," is available
online on U of I Extension's farmdoc site.
"As of yet, prices farmers pay for fertilizers have not
decreased as much as declines in wholesale prices," Schnitkey
said. "In fact, retail prices have not declined much at all in
many areas of Illinois.
"Non-declining prices are attributed to large unsold
fertilizer inventories held by many retailers."
Retailers will lose money on those inventories if they follow
wholesale prices down, he noted.
"While retailers will suffer financial losses, there are
incentives for farmers to delay purchasing fertilizers, waiting
for fertilizer prices to decline," he said.
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"Waiting to purchase fertilizer poses some risks to farmers," he
noted. Among these, he said, is the possibility supplies become
limited if suppliers curtail production. Geopolitical events may
also affect prices.
"The point is not that these or other events will occur, but that
there remain risks for higher fertilizer prices," he said.
"As farmers make planting decisions, up-to-date fertilizer prices
should be used in calculating relative profitability."
[Text from file received from
University of
Illinois Extension]
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