This is a truely frightening thing that's happening, and i do agree it's sneeking up, below everyones radar. This would be big news, except the financial crisis is bigger news, so no one is hearing about it.
Australian fertilizer companies are in big trouble. They made a killing as prices rose last year. They kept buying on the way up, then selling for even higher prices. IPL claims that when urea was $1100 per tonne, they seriously thought the price was going to $2000 per tonne. Every fertilizer shed in Oz is full of the over priced stuff, and farmers aren't buying and can't buy.
If grain is still at current low prices by wheat planting in 5 months, and if fertlizer prices haven't crashed by at least half, I will simply not plant a grain. It is not possible for me to make a profit from $1000 urea, even higher phosphorus prices, and grain where it's at now.
Might go and do six months backpacking, or plant the whole place down to lucerne and lease to a cattle bloke.
I've cut back the summer plant. Gives me some sort of morbid satisfaction that I'm cutting production with global grain stocks so low. Every farmer needs to do his bit.
This fertilizer will be staying where it is unless prices drop dramatically.
IPL ceo even had a letter in 'THE LAND' this week almost pleading with farmers to buy his $1000 fertilizer. Pretty much saying we won't get cheap stuff till we buy it all and empty the sheds. Well as far as I'm concerned, it's his problem, not mine. These fertilizer companies made a fortune with the rise of the bubble, now they can just share the pain with farmers as the bubble busts.
Good luck to all the grain farmers on this forum, we will need it.
