Falling fertilizer prices and delayed farmer purchases are pressuring ag retailers struggling to match supply and demand while pricing product in a declining market.
With fertilizer prices continuing lower in the post-planting season, retailers are reducing price risk exposure by minimizing inventory, including sourcing material after the sales. More fertilizer is also being shipped by truck, shortening delivery times and reducing price risk exposure.
Farmers are expected to remain cautious with their input purchases, putting retailers in a supply-demand conundrum heading into the fall application season.
With agricultural commodity prices still down sharply from previous years, and the U.S. dollar’s strength encouraging fertilizer imports, fertilizer prices are expected to remain soft.
The longer term price forecast also poses risk for retailers, but benefits for growers. With the exception of seasonal rallies, fertilizer prices are expected to weaken into 2017. Spot urea prices are expected to remain flat to lower.
Retailers are also weighing the risks of increased Occupational Safety and Health Administration (OSHA) regulation regarding retail storage of anhydrous ammonia.
OSHA lifted the retailer compliance exemption regarding the Process Safety Management for Highly Hazardous Chemicals (PSM) standard in July 2015. In May 2016, OSHA announced it would begin enforcement on ag retailers. The cost of compliance could be substantial.
However, Congress was considering a bill to reverse the order.
Read Northwest Farm Credit Services (FCS) Crop Inputs Market Snapshot. 
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Dave Natzke
- Editor
- Progressive Forage
- Email Dave Natzke
