Heavy preplant demand continued to deplete fertilizer inventories and create supply outages for ammonia, UAN, and urea at many Midwest terminals last week.
One industry source said more Midwest ammonia terminals were out of product than had spot tons for sale last week, and another said many terminal that source tons by barge instead of pipeline were completely drained as the week advanced.
CF Industries Holdings Inc. sent out an alert to customers on April 11 that it was unable to load UAN and anhydrous ammonia at its Peru, Ill., terminal, citing “an interruption in supply availability.” CF said the interruption would only last from April 11 until 6 a.m. April 12, but the company indicated to customers that ammonia was not available for the April 12-13 shipping period at Frankfort and Mt. Vernon, Ind., Spencer, Iowa, and Mankato, Minn.
CF also alerted customers on April 10 that it was unable to load urea at its Pine Bend, Minn., terminal due to “an interruption in supply availability.” CF said the interruption would be in effect from Wednesday, April 11, until further notice.
Earlier in the month, CF had notified customers that it was not able to load anhydrous ammonia out of its Aurora, Neb., terminal until further notice, and that UAN loading at Woodward, Okla., had also been suspended until further notice (GM April 9, p. 1). Some industry sources reported last week that Woodward was producing again, but remained behind schedule on shipments.
“CF Industries has an extensive fertilizer production and distribution system which is designed to serve our customers’ needs,” CF said on April 12 in response to a Green Markets inquiry about the status of those facilities. “In the course of our daily activity, we communicate with those customers on a regular basis so that we can continue to serve them well. We do not view our routine customer communications as rising to the level of media announcements, and as such, have no comment.”
Koch Nitrogen did not respond to questions about its Beatrice, Neb., facility, where the company reported on April 3 that UAN truck loading had been suspended until further notice.
Unseasonably warm weather in March gave many Midwest growers the green light for fieldwork a full three weeks earlier than normal, sources said. That early demand, coupled with production hiccups at some plants and the reluctance of farmers and dealers to commit earlier to spring tons, has left the distribution chain particularly vulnerable to outages this spring, sources reported.
“We’ve had an extended run, starting in early March, and we haven’t had much bad weather,” reported one Iowa contact last week. “There’s still stuff rolling out the door every day, and we’ll keep selling for the next 30-40 days.”
Some sources acknowledged that much higher spot prices had “throttled back demand” in some locations last week, but most continued to describe movement as hot and heavy. The looming ammonia and UAN sidedress run on corn, as well as the upcoming rice application season for urea, were likely to keep the pressure on nitrogen inventories. “There’s still a lot of nitrogen to be applied up north and for rice topdressing,” said one source.
“Dry nitrogen and ammonia have been sucked down,” added another Midwest contact on April 12. “UAN is really just cranking up now, but I can’t help but think it’ll follow the other nitrogens.” UAN was already following urea in terms of price increases, with terminal and NOLA barge values ramping up quickly in recent weeks.
Exactly 10 years ago, the domestic industry was also reeling from limited nitrogen supply and rapidly firming prices during the busy planting season (GM April 15, 2002), but that supply situati