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Agrimarketing : March 2009
Caption the global financial crisis. In the U.S., 21%of U.S. ammonia production is used for direct field application, and 19%in the production of nitrogen solutions.Aweak non-fertilizer seg- ment,which accounts for 31%of ammonia use, has led to decreased production due to less demand in constructionmaterials. Ureamarkets were hit hard in 2008 by a delayed planting season due to adverse weather conditions, leading to reduced fertilizer applications. Phosphate TheMiddle East andNorthern Africa account for nearly 80%of global phosphate rock exports. China has decreased DAP andMAP exports due to taxes imposed on exports, in addition to a previous export tax. India has accounted for a majority of DAP andMAP trade due to high domestic production costs whichwill likely continue. U.S. DAP prices fell back below$1,000/ton due to full dealer pipelines and lack of farmer demand. Potash Wheat, rice, corn, soybeans and sugar cane consume roughly 50% of the world’s potash, meaning global potash demand is not highly dependent onmarket fundamen- tals for any single crop or growing regions.World potash imports have increased since 2000, driven by emerging markets inAsia and Latin Amer- ica. Brazil’s soy- bean area has expanded nearly 60% since 2000, as a primary grower for China’smas- sive soybeanmar- ket, while other areas of growth include corn and sugar cane—also a potash intensive crop. India relies on potash for wheat and rice production, as there is little room for acreage growth. THE OPPORTUNITY Though there has been recent tur- moil in the global financial and com- moditymarkets, long-termdrivers for increased fertilizer business remain soundly in place.With the worldwide need formore grain pro- duction, the outlook for the crop nutrient industry is encouraging. Export restrictions and foreign gov- ernment subsidization of agriculture tend to decrease fertilizer exports and push prices up. Simultaneously, increased food demand is creating a strain on grain supply, further increasing the importance of crop nutrients inmaximizing crop out- puts in order to support demand. Farmers can continue to capital- ize on these opportunities in the coming year. The increase in farm input costs has been offset by higher crop prices in the past two years. This has led to highermargins for U.S. farmers. Farmers are currently postponing fertilizer purchases due to volatility in the grainmarket, but projected farmer returns continue to remain strongwhen compared to historical levels. Bottomline—the importance of fertilizer to ensure adequate grain productionwill not change in a volatilemarket. AM DavidAshis Development Manager forABG, anAdayana Company. E-mail: firstname.lastname@example.org Mobile sponsoredby 1. AgriMarketing News 2. Weather 3. FarmProgress Friday Powered by iNet Solutions Group Get Your News on the Go! Now you can get news and weather for agri-marketers while you are on the go on your favorite wireless mobile device. Away from your computer? Traveling? In an airport? In the middle of a corn field or feedlot? Get a quick update on breaking agri-marketing news and weather. Just open yourWeb browser and enter www.AgriMarketingMobile.com. AgriMarketing magazine 1422 Elbridge Payne Road, #250 Chesterfield, MO 63017 636/728-1428 info@AgriMarketing.com Visit the AgriMarketing Mobile FAQs page for questions about mobile application functionality. This service is free to agri-marketers. Powered by iNet Solutions Group www.inetsgi.com March 2009 s AgriMarketing 41