Over 1,000 players are expected to be on hand July 22-25 as the fertilizer industry converges on San Antonio for the 81st Annual Southwestern Fertilizer Conference. As of July 18, Conference Director Pat Miller put attendance at 1,050, with another 50-75 expected to sign up at the meeting, coming close to last year’s record breaking attendance of 1,176.
As might be expected, outlooks for business at the meeting were mixed. As always, some felt attendees would simply show up to talk with buyers to kick tires. Others said there might be more activity this year, citing the recent run-up in urea prices just prior to the meeting. Still others disagreed, saying that while urea going up the Arkansas River may have recently pulled a premium, drought-like conditions in much of the Southern Plains is a cause for concern, and that buyers will only buy as much as they need and no more. Indeed, the seven county area surrounding San Antonio has just recently imposed mandatory water restrictions, which are expected to last one month.
While phosphates were fairly quiet going into the meeting, sources were wondering about the status of potash, particularly in light of the lag in producers firming up deals with China and India. The Southwestern meeting comes just before major North American potash producers will report their results for the quarter ending June 30.
Despite any near-term concerns over nitrogen prices, many sources polled last week were optimistic about U.S consumption in 2007, citing higher corn prices and low fertilizer inventories throughout the system.
“I, as everyone, am looking forward to the Southwestern Conference at this time of decreasing natural gas costs and decreasing ammonia and other nitrogen prices,” said Dr. John Douglas of Douglas & Associates. “We are certainly in changing times, with much uncertainty in everything.”
“The honest attendees will have to concede they are disappointed with the 2006 spring season, for it is clear that sales/shipments slipped below the previous year,” said Ed Wheeler, industry veteran. “Dealers will be cautious in their buying habits, and will put off making firm deals in thinking about the fall market.
“Probably the cheeriest news on the horizon are the near daily announcements of new plants being installed to produce ethanol and biodiesel. Heretofore, large grain interests have snubbed the parade, but now they, too, are actually ordering the plants and machinery to secure production. It is interesting to note that earlier plants have been relatively small, but the big boys now are announcing the installation of big plants. This should be reflected in the price of corn and soybeans in the months ahead, say early in 2007.
“I don’t buy the argument that we are going to run out of corn,” said Wheeler. “If corn goes to $5.00 a bushel next spring you can bet the farmers will rise to the call! So we can expect caution at San Antonio, but the wars in the Middle East are going to keep the price of crude oil high, and will encourage additional grain production for domestic sited conversion plants.”