Fertilizer and other things

[errolanderson]

Crude oil prices have dropped $20 per barrel over the past ten (10) hours from Sunday evening highs. This is now the largest intraday price decline in oil prices in-history. This is taking grain futures off their highs . . . .

Cattle board gapped lower at the opening bell. Feeders: Hold your price protection.

[errolanderson]

Crude oil prices have now collapsed 30% from highs seen just last night . . . .

[helmsdale]

Oil, let alone grains hasn't kept up with inflation. $100wti, or $10wheat are major psychological barriers, but what does $100 from 2008 buy you today? Phenomenal that producers can turn profits at $60, and $100 is considered "gouging" these days.

[bobofthenorth]

No credible manufacturer will propose let alone build a new nitrogen plant in western Canada. Currently western Canada produces roughly enough nitrogen for our use. That means that the marginal tonnes have to be imported and therefore priced off NOLA. If we were a significant exporter those same tonnes would still be priced off NOLA but they would be NOLA minus freight. As it is they are NOLA PLUS freight. Exactly the way WCS is priced, every tonne/barrel is worth what the marginal units are worth. So to hammer that point home, the price at the plant gate drops by double the freight to NOLA the moment western Canada flips to purely export pricing. No world scale manufacturer will ever build a land locked plant under those constraints. And that's not even getting into the endless enviro-BS that they would have to endure in this country.

Maybe there would be a case for government to build something but the farm vote isn't that important and government doesn't really have a good track record with operating businesses. I don't know the specifics at Belle Plaine but PCS was a bottomless hole until it was privatized.

Free advice = worth what you paid for it. If you don't have your nitrogen bought, buy pulse seed. If you do have your nitrogen bought but its not home, plug the truck in. If its bought and hauled, sell it and buy pulse seed. But if you're going that last route sell it and cash the cheque immediately because this situation can go down as fast as it went up.

[TASFarms]

Past history says pay for fertilizer and don’t grow much pulses because that is the opposite of most penny pinchers do.

[Old Cowzilla]

Bed pack in feed pens starting to look more like an investment rather than an liability Also seeing restaurant money going away to buy gas which is hammering cattle futures. Throw in really dry or really wet spring and fert usage gets really out of wack at these prices.

[bucket]

No credible manufacturer will propose let alone build a new nitrogen plant in western Canada. Currently western Canada produces roughly enough nitrogen for our use. That means that the marginal tonnes have to be imported and therefore priced off NOLA. If we were a significant exporter those same tonnes would still be priced off NOLA but they would be NOLA minus freight. As it is they are NOLA PLUS freight. Exactly the way WCS is priced, every tonne/barrel is worth what the marginal units are worth. So to hammer that point home, the price at the plant gate drops by double the freight to NOLA the moment western Canada flips to purely export pricing. No world scale manufacturer will ever build a land locked plant under those constraints. And that's not even getting into the endless enviro-BS that they would have to endure in this country.

Maybe there would be a case for government to build something but the farm vote isn't that important and government doesn't really have a good track record with operating businesses. I don't know the specifics at Belle Plaine but PCS was a bottomless hole until it was privatized.

Free advice = worth what you paid for it. If you don't have your nitrogen bought, buy pulse seed. If you do have your nitrogen bought but its not home, plug the truck in. If its bought and hauled, sell it and buy pulse seed. But if you're going that last route sell it and cash the cheque immediately because this situation can go down as fast as it went up.

So then the question becomes - why is there no infrastructure to import into Canada , store required needs like a petroleum reserve and bypass NOLA and the other nonsense.

The current government is spending billions for a people moving train down east , and while there may be some merit to it , there is no real value once it is built.

Fertilizer infrastructure storage and movement would have annual returns and help food security .

Misdirected investments in this country is where it fail.

And if there is no business case for a fertilizer plant , there should be a business case for importing infrastructure.

[dave4441]

I dont understand why anyone would think that having localized fertilizer plants producing here in the prairies would change anything OTHER than supply.

Does anyone think that price would be lower if we had 3 nutriens producing urea in red deer?
its all priced out of new orleans and with a globalized economy ...that means these hiccups affect everything. Case in point... diesel.
Northwest upgrader is producing diesel right here outside of edmonton. Do we get a cheaper price? Lol.

If 100 Farmers got together and built a urea plant... you think that somehow the urea would become cheaper....but only in a localized area? Mmm no. Sorry. Those days have passed.

I understand that supply and demand dictate...but when everything is priced by traders who are running on cocaine and rumors.. we dont stand a chance. Plus.. why would those farmers want cheaper urea, when they could just make more per unit selling it at market value than using it in their own field.

Its the same thing can be said about crop values. You cant really have it both ways.

India has a poor crop.... pulse prices will increase...

i fear that the " lowering ANY costs" by production ship...has long since sailed.

And as for australia shipping to quebec.. its just cheaper. If all the workers and builders of LNG pipelines were willing to work for peanuts.. then yeah, maybe a pipeline could get built. But i dont know many of my buddies here in fort sask who are welders in the oil patch that are going to work for * checks web* 20 to 30 k per yr like a chinese welder does!

We cant build a hospital in 2 weeks because our labour isnt slave labour.
the approval process/ site selection...etc.. can definitely be streamlined to shorten the build times down....but things need to be done properly and transparently. Otherwise... everyone and their dog will whine about.. brookfield...P3 school building schemes...... snc lavalin...etc.

Seriously tho... we all KNOW a revamped railroad to churchill would help western canadian farmers... so if brookfield stepped up and financed the whole thing..who cares?

if the indigenous people want to throw a bid in and build it? Great.
Use their dollars...regardless of how they got them.

Also... i hear guys whining about the cost of fertilizer ( it sucks...i agree) but none of us are cheering the increased price of commodities...

Agreed. It always makes me laugh when people want globalized prices for their grain but some kind of localized prices for their inputs. Prices that are disconnected from the global market.

Reality is our grain has little value sitting in the middle of the prairies.

[dave4441]

Seems canola is the only thing that went on a run. Wheat sucks. Peas kinda suck. Lentils suck the big one.

I have sympathy for any grower who hasn't bought fert yet, sometimes some people just can't buy it when it's at its cheapest. Having to sell crop to pay for the fert used to grow it let alone pay for next year's 6 months in advance of needing it.

I can comment on lentils. Dubai buys 15% of our lentils. Reds for splitting for export to middle east and green lentils for Iran. Relationships for trade to Iran, from Dubai, may be a little stained. Just a bit at least.

And freight costs for ocean freight have increased. In the end this conflict will not benefit Canadian growers as the Ukraine war did for some time. This is a falling tides situation for many crops except canola.

[blackpowder]

So then the question becomes - why is there no infrastructure to import into Canada , store required needs like a petroleum reserve and bypass NOLA and the other nonsense.

The current government is spending billions for a people moving train down east , and while there may be some merit to it , there is no real value once it is built.

Fertilizer infrastructure storage and movement would have annual returns and help food security .

Misdirected investments in this country is where it fail.

And if there is no business case for a fertilizer plant , there should be a business case for importing infrastructure.

Western Canadian farmers paid for the ability to store almost their entire years production themselves.
Soon they will have the ability to store a year's fertilizer needs if they haven't already.
One was thanks to govt mismanagement and intervention, the other, the opposite.