Nitrogen and Phosphate Pricing - Broadcast 07_18

Southern Great Plains.
July 17, 2017.
Bert Bock and Guy Swanson Reporting.

Wholesale pricing of NH3, 12.8 cents per lb. N.
P205 as Merchant Grade Phosphoric Acid, MGPA. 37.3 cents.
P2O5 as 10-34-0 is 45.5 cents.
Morocco OCP, P2O5 at 25.7 cents. Trending downward for sure.

Guy—The OCP price for phosphoric acid delivered to India is $567/2200 lb. P2O5 = $0.257/lb. P2O5.

The merchant grade phosphoric acid price in the southern plains this week is $7.45/20 lb. P2O5 = $0.373/lb. P2O5.

The APP price in the southern plains this week is $335/ton APP.

The AA price in the southern plains this week is $210/ton AA. 210/82 = $2.56/20 lb. N. That translates to an N value in APP of 10 x 2.56 = $25.60/ton APP.

The cost of P2O5 in APP after giving value for the N based on AA is 335 -25.60 = $309.40/ton APP. 309.40/34 = 9.10/20 lb. P2O5 = $0.455/lb. P2O5.

The numbers to compare are highlighted in yellow. All prices are wholesale delivered to the designated locations.

The P2O5 in APP costs a lot more than the P2O5 in merchant grade phosphoric acid (and super phosphoric acid for that matter because the price for merchant and super acids are usually the same per lb. P2O5).

I will be happy to go over this with you, if needed.

Bert

OCP faces cut in EU phosphoric acid prices, after India wins discount

OCP, the Moroccan phosphates giant, looks like facing a cut on prices of phosphoric acid charged to European customers, after a deadlock over talks with Indian buyers ended with a discount.

State-controlled OCP, the world's leading phosphate exporter, is in talks, seen as unlikely to end before next week, with European customers over phosphoric acid contract prices for the July-to-September period.

After a cut in Indian values, it is now widely anticipated that European contracts will also decrease although the magnitude has yet to be determined.

OCP supplies almost half of all European Union imports of phosphoric acid, which is used predominantly as the key raw material of phosphate fertilizers, but also in the likes of rust removal products, soap, toothpaste and as a food additive.

Negotiating positions

OCP earlier this week settled its Indian phosphoric acid contract price for the July-to-September quarter at $567 a tonne, on a cost and freight basis.

That represented a decrease of $23 a tonne from the price agreed for the April-to-June quarter, and followed talks which had revealed widely distant price expectations from OCP and its buyers.

Entering the quarter, OCP in Morocco was targeting a price increase of $25-30 a tonne, whereas buyers were seeking decreases of the same magnitude.

Other suppliers were understood to be targeting rollovers.

EU imports

The EU imported 395,000 tonnes of phosphoric acid in the first four months of 2017, more or less in line with volumes for the same period of 2014 and 2016, but down from 488,000 tonnes in the same period in 2015.

April imports, at 87,847 tonnes, were notably down on the 103,078 tonnes for the same month of last year.

December 19th, 2011

News about Phosphate.
The US has Six Miners of Phosphate ore utilized to build phosphate fertilizer

The Six Miners are located in four states Florida and North Carolina….and the Western Reserve in Utah and Idaho.

The Six Miners produce 1.3 billion dollars of marketable product….about 26.3 million tons.

The world mine production of phosphate ore is 176 million tons annually in 2010.

The United States utilizes about 14.7% of the total world production….and US reserve is 2.1% of the world’s measured reserve.

The United States in 2010 imported 15% of its consumed phosphate need.

Morocco /Western Sahara holds about 77% of the world’s reserve and supplies about 26 million tons to the world market….about the same as what is used in the US.

Phosphate Ore is primarily located in sedimentary marine phosphorites ….but there are also igneous deposits in Brazil, Canada, Russia and South Africa.

The sedimentary marine phosphorite deposits are between 21% P2O5 to 30% P205.

Trends.

World Phosphate production will increase to 228 million tons by 2015 with supply increasing 130%.

World phosphate production has been increasing at about 5.7% per year.

The United States uses less phosphate….Since 2006 the use of phosphate has been reduced 8%.

However in the same time line the price of Ammoniated Phosphate fertilizer has increased 400%.

In the same 5 year time line….a net 5 million more acres of agricultural land has been put back into production from CRP.

As the CRP acreage begins to decline from 34 million acres to 26 million acres the impact on fertilizer need is increasing.

High prices of phosphate fertilizer in relation to the crop price does reduce use.

Reduced use is also related to federal regulations and the clean-up of waterways based on the EPA mandates.

New mines are being opened in Canada and Peru, Saudi Arabia, Kazakhstan, Russia, Namibia, Australia.

Mines have expanded in Idaho.

Old mines are being closed in Florida.

85% of the mined US ore comes from Florida and North Carolina.

Super Phosphoric Acid 0-68-0 is neither imported or exported.

The supply of Super Phosphoric Acid is limited by the supply of rail cars during certain periods.

Overall use of agricultural phosphate can be reduced by 200% with proper application process techniques that produce good long term economics.

Conserving is a good solution, Exactrix TAPPS, the industry benchmark tool of phosphate application, is 200% more crop effective than other application techniques.

Sourced from the US Geological Survey. Mineral Commodity Summaries, January, 2011.

Exactrix Engineering, Economics, and Pricing Guide 2011, December.
Primary Assumptions…..South Western Kansas. Dec. 10, 11. Hugoton, KS.

42 cent N as NH3,                           $688/T                        $412/T following Exactrix Process at .6
85 cent P as APP and N                    $750/T                        $525/T following TAPPS process at .7.
55 cent S and N as ATS.                     $428/T                        $367/T following TAPPS process at .7.
77 cent K and S as KTS, Finley, Washington.   $650/T                         To be determined.
Ammoniated Zinc $1.25/lb Tetra Zn.                                       Process at 3 to 5 times more cost effective.

NH3, 82-0-0 pricing. 1640 pounds per ton.                              $1,000/Ton is 61 cent N.
APP, 10-34-0 pricing. 880 pounds per ton.                              $1,000/Ton is #1.13 P. and N.
ATS, 12-0-0-26S pricing. 760 pounds per ton.                         $1,000/Ton is $1.31   S. and N.
KTS, 0-0-25K-17S, 840 pounds per ton.                                   $1,000/Ton is $1.19 K and S

67 cent N 46-0-0, Urea.
60 cent P, 11-52-0, MAP.
68 cent N, 32-0-0, URAN. Also UAN

Humic Acid. Hydra Hume, New Horizon, Helena Chemical, Colby, KS $6.00 per gallon.

Testing in 2011

Irrigated Corn Production.
Strip Till Corn on Corn, 140 pounds N/A, 30 to 60 pounds APP/A, 15 to 30 pounds S/A, 1 pound AZn/A produced excellent returns….Higher rates of N were wasted. Higher Rates of APP were not required in Rotational Band Loading. S as ATS continued to stabilize N and improve N availability as TAPPS.

KTS testing continues. Potential for improving N efficiency in Corn, Wheat and Cotton.

KTS large field testing in High Protein Spring Wheat will continue in Alberta and North Dakota.

Humic Acid produced higher yields in Wheat and Corn….adding about 7% to 8% more net income.

PNW Landscape and Rainfall Pattern….Two application passes of TAPPS does produce higher proteins in HRWW and HRSW. $15 of nutrient cost resulted in $60 of additional income using 12 inch band spacing.

Crop Availability of Nutrients, Method of Application Makes the Difference.

TAPPS application reduces P cost to 42.5 cent per pound of P by being 200% more crop available due to Triple Super Ammonization. Thus 11-52 would need be 42.5 cents per pound of P or 70% less than it is priced based on the Exactrix method of application.

Ammoniated Zinc at $1.25/Lb. allows blended applications of 2 pounds typically with APP. This improves the efficiency as compared to Chelated Zinc or Dry Zinc and reduces cost up to $7.00 to $10.00 per acre based on the Exactrix method of application. The max. ratio is 18 P to 1 Zn using Poly Phosphate no higher rates unless the Zn is flow injected in the APP final filter.

Exactrix NH3 is 166% more crop effective due to the high pressure injection process…Exactrix reduces cost in all flow ranges by 60%. Effectively Exactrix TAPPS NH3 is priced at 25.2 cents. Thus pressure reducing NH3, Urea, or URAN or UAN would need to be priced at 25.2 cents based on the Exactrix method of application..

ATS stabilizes the band and provides micro nutrient release. Exactrix KTS also makes N more crop available.

Hydra Hume improved CEC of the Band of TAPPS. Hydra Hume improved the economics of crop production. New techniques of application including flow injection to the final filter are under review.

Click on images to enlarge

November 28th, 2008

Bert Bock

Nutrient Pricing in Irrigated Western Kansas.

NH3
NH3 is 40 cents per pound of N. Exactrix yields peak at 140 to 160 pounds of N. Exactrix NH3 applications can reduce yield due to uniformity if applied at rates greater than 160 pounds N as NH3. NH3 is the base line material.

Urea
Urea is 50 cents per pound of N. 125% more cost and only 50% as effective if top dressed as compared to Exactrix. So Urea is adjusted to $1.00 per pound N…..or you must apply twice as much urea to compete with Exactrix single disc application of NH3. Thus Urea top dressed applications must be made at 320 pounds N per acre to compete with 160 pounds of N as NH3.

Solution 32
Solution 32 is 60 cents per pound of N. 150% more cost as compared to Exactrix applied NH3 and only 50% as effective if top dressed or applied through a pivot as compared to Exactrix….So 32-0-0 is adjusted to $1.20 per pound of N…..or the producer must apply twice as much 32-0-0 to compete with Exactrix single disc application of NH3. Thus solution 32 applications must be made at 320 pounds N per acre to compete with 160 pounds of N as Exactrix NH3.

Salvage and Convenience, Solution 32 or Solution 28
If solution 32-0-0 is banded the corn will not yield as high as Exactrix banded NH3. ……and the cost will be $32.00 more per acre. The yields will be close….but the NH3 application will be about 5% to 10% higher.

TAPPS
Long Term nutrient efficiency is increased when 10-34-0 and 12-0-0-26S is added to the streaming liquid flow of NH3. The result is a yield increase of 10% to 20% and a double in the efficiency of placed P. Thus Liquid Poly Phosphate is twice as effective as compared to dry phosphate 11-52-0. Presently 10-34-0 costs 150% more than 11-52-0. Adjusted to performance dry 11-52-0 really costs $1.34 per pound of P . 10-34-0 costs $.97 per pound of P.

Less is More.
www.exactrix.com/pt.htm
www.exactrix.com/TF.htm
www.exactrix.com/ppt.htm
www.exactrix.com/ben.htm

http://usda.mannlib.cornell.edu/usda/current/wasde/wasde-09-11-2009.pdf

Exactrix owners report strong satisfaction with the Exactrix product following a record production year in 2009.

The most common comment, “Reduce nutrient use has resulted in improved net margins”.....and in almost all cases a 5% to 10% increase in overall yield with TAPPS as compared to other approaches of fertilizer application and formulation.

About 12% more net income is delivered to the bottom line based on several 3 year trend line studies under center pivots.

The USDA predicts the following values for key commodities for the rest of 2009 thru 2010 crop year.

Corn at $3.05 to $3.65....a 17% variation.
Wheat at $4.70 to $5.50....a 15% variation.
Soybeans at $8.10 to 10.10.... a range of variation of 20%.

Exactrix Budgets can be developed based on the these values.

Exactrix is evaluating the cost of nutrients for 2009...fall seeded and fertilized crops.

Here is the typical mark for that most producers will be paying in the month of September on the Great Plains.

Delivered Ammonia in the month of August for on farm storage, western Kansas was much lower at $250 per ton.

Once again proving that producers with On-Farm Storage can pay back the storage tank investment rapidly with tremendous flexibility.

September 11, 09, Western Kansas.
Primary Nitrogen….82-0-0 NH3 at $330 per ton......20 cent N. (Urea is price at 41 cents)
APP 10-34-0 at $400 per ton. Nutrients at 45 cents for N and S.
ATS 12-0-0-26S at $225 per ton....30 cents for N and S

Recommended rate corn on corn center pivot production in No-till and Strip Till Exactrix 15 inch band centers preferred is…. 140 pounds N, 20 pounds P and 20 pounds S, .25 pounds Zn. $37.77… Seed row fertilizer treatment 10-34-0 plus zinc allows up to $30 to $35 to be applied and considered in the budget.

200 bushel per acre corn at $3.00 per bushel or $600 gross income…Thus allowing 12% of the Gross for Nutrients results in a budget of $72.00 per acre.

Yields to 300 bushels per acre have been reported with the 140-20-20-.25 Zn rate based on very favorable weather….applying any more nutrient would be an economic waste and could reduce yield.

A bankable budget for 200 bushel corn per acre with Exactrix TAPPS formulators….….Center Pivot Production Corn on Corn….is $72.00 per acre as TAPPS in crop year 2009/10.

In every single case whether dryland or irrigated….spend no more than 12% of the Gross with Exactrix systems.

Economics Rule…..improve the application process and let the economics of Exactrix drive the crop production not the agronomist or soil lab recommendation….not the proven yield method or the soil lab method can be utilized with the process management systems of Exactrix Application Systems. Typically most Exactrix systems come in at .6 of the proven yield method.

Year after year it is proven that Exactrix applications provide 166% more crop available nitrogen…..and 200% more crop available Phosphate with nitrogen band stability a good use of Zn.

One good crop will pay for the entire Exactrix system….and maybe the first 1,000 acres under center pivots compared to the fertigation method with 28-0-0.

No-tillage Single Disc Custom Seed and Application Rates are $20 to $25 per acre with Exactrix TAPPS formulation.

Exactrix TAPPS Application on large acres using single disc openers in pre-plant or side dress are $15 to $17.50 per acre.

All custom no-till applicators and no-till custom seeders report more fall business than they have ever had with Exactrix Application..TAPPS.

One Exactrix custom applicator with a 40 foot Dutch tool bar has completed 8,000 acres of pre-plant banding in less than 30 days Dodge City/Wright, KS charging $15 per acre.

Most custom seeders do not exceed 8,000 acres of winter wheat in 45 days with 42.5 foot single disc drills.

Guy Swanson
ASABE, ASA, ACS, WSDA Certified.
Exactrix Globabl Systems.
Spokane, WA

To Review TAPPS with high speed single disc application go to www.exactrix.com/TEXSDX.htm

US Census Bureau
Current Industrial Reports (CIR)
MQ325B Fertilizer and Related Chemicals.
Updated June 16, 2008

What Do You Know and When Did You Know It?

NH3.

Current News. Production of NH3 is accomplished around the US with either natural gas or coal. No nuclear powered NH3 plants are yet in production. NH3 is also imported from other countries and primarily from the southern Caribbean to meet the 21 million ton annual need.

Long Term Outlook. Lowest Cost of Production NH3 will come from very small and very large nuclear powered ammonia plants at $160 to $180 per ton NH3 cost…… with no CO2 emission in the process. NH3 will move in time proven safe pipelines in the future. Transports can be used up to a 250 mile radius depending on the area. Railroads may also be used but may not be competitive with small pipelines.

In year 2006….Ammonia Plants in the United States ran at 76% of design capacity. This does not include terminated plants.

Short tons recorded by the federal government.

In year 2006 10,981,000 tons NH3 were produced.

In year 2007 11,648,000 tons NH3 were produced….2007 Production up 106% over 2006

1 full year….The First Quarter of 2006 to the First Quarter of 2007…..11,579,000 tons were produced.

1 full year…..The First Quarter of 2007 to the First Quarter of 2008…..11,519,000 tons were produced.

Production of NH3 is not increasing….in the last two years production has decreased about ½%.

World Wide Production of NH3…..is increasing at about 2% per year.

Corn Acres and Wheat acres increased and legume acres declined in this time period 2006 to 2008.

The price per US short ton NH3 across the Great Plains has doubled between 2006 to 2008 from $350 per ton average to $700 per ton average. Typical pricing of NH3 1999-2000, $180 per ton. Typical pricing 1984-1985m $90 per ton.

The Big N…..NH3 directly applied is the largest share of the Nitrogen Market in the US….at 54% of the entire N applied to crops.

NH3 is the….Winner of two Nobel prizes…. And has the technical hedge for North American producers saving up to $50 per acre as compared to Europe or South America…

NH3 is the best nitrogen choice for producing commodity crops and providing a reasonable cost of production for energy and food.

NH3 is the beginning of ammoniated commercial fertilizers as N, P, and S sources. S sources tend to have lower price increases such as ATS. ATS manufacturers need producers to consume ATS to assure proper petroleum refining operations. Very few manufacturers of ATS means price gouging is possible….but not practiced…low export demand.

Prices Quoted Fall 2008 Production Application, Peace River Alberta….$1,260 per US Short Ton NH3 or 77 cent N.

This is good case for more competition in the industry. NH3 manufacturing is a key core business in the hydrogen economy. Three hydrogen atoms vs. H2 move very effectively in safe pipelines using NH3.

Phosphoric Acid

Production of Phosphoric Acid occurs primarily in North Carolina, Florida, Wyoming and Idaho.

Phosphoric Acid is neither imported nor exported. Therefore the falling dollar should have no effect on the price….strictly demand domestically should determine the price. Phosphoric rock is no longer imported.

Phosphoric Acid is the beginning of all ammoniated P based fertilizer.

In year 2006…..11,797,000 tons were produced.

In year 2007…..11,977,000 tons were produced.

1 full year….First quarter of 2006 to first quarter of 2007……11,904,000 tons were produced.

1 full year….First quarter of 2007 to first quarter of 2008……11,771,000 tons were produced.

In last 12 months ending March 30, 08 production of phosphoric acid has decreased 1.1%.

The demand for phosphate based fertilizers is up significantly and with only three to four major producers…Agrium, PCS, Simplot and very little phosphate rock imported due to the falling dollar it is apparent that prices can be increased when supply is reduced.

Phosphate pricing has increased from 1980’s pricing of 8 cents per pound of P2O5 to a Fall 2008 price of $1.79 per pound of P205 in Northern Alberta…..The Phosphate Market is manipulated by three producers.

The supply of phosphoric acid has been reduced…….and the demand has increased…..new mine sites are being explored….and the economic model says that more money can be made by the producer of phosphoric acid if the supply is reduced….A good case for more competition in the business.

Potash.

Close to a Monopoly….Potash Corp sets the price for K.

More competition….maybe a new underground mine operation in North Dakota is required.

Change Required.

A good understanding of the issues means……..The fertilizer industry will change.

Nuclear powered NH3 plants will be owned by Cooperatives and Power Administrations as carbon emissions are limited. A better source of NH3 is apparent. NH3 will be sold to the fertilizer industry by the Power Administrations.

Pipe Lines will move NH3 for the hydrogen economy.

Use of mined Phosphate will be reduced since animal sources are now very economical….Phosphate sources are limited…new sources will come on line.

Potash supply and pricing can be greatly improved with more competition.

No-till farming techniques, Rotational Band Loading of geometrical placed nutrients (Targeted Bands) and Precision Process Management systems such as Exactrix reduce the need for commercial fertilizers presently.