Farm Ireland
Independent.ie

Saturday 18 November 2017

Urea is the way

Opt for cheaper N source as the cost of CAN takes a hike

Caitriona Murphy

Caitriona Murphy

CAN prices are continuing to move upwards, making urea the best value per kilogramme of nitrogen on the market.

Best prices for CAN have moved from €185/t three weeks ago to €205-215/t late last week. However, these quotes were predominantly secured by large buyers or those offering cash deals, and CAN quotes have moved to €245-250/t at the upper end of the scale.

There are some deals on CAN still being closed at the €210-215/t range but there is upward pressure, and the window of opportunity to achieve lower CAN prices is narrowing quickly.

At current prices of around €280/t, urea is very attractive, equating to a cost of 60c/kg of nitrogen, compared to 80c/kg of nitrogen for CAN.

Even taking into account the poorer usage of urea under less-than-perfect spreading conditions, urea remains better value than CAN at present.

However, stocks of urea are likely to run down in the coming weeks and replacement values are set to be €30-40/t higher than the current level.

It is understood that suppliers forward bought most of the 100,000t of urea required for the Irish market. In the meantime, urea prices have risen sharply, causing an increase in the replacement cost.

Meanwhile, prices for NPK compounds are still stable and are likely to remain so in the short term.

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The latest IFA fertiliser price survey shows urea prices are similar across the country.

Big bags of urea, delivered on-farm, are being quoted at €280-320/t in Munster and €280-330/t in Connacht, with the lower quotes applying to cash deals.

In south Leinster, quoted prices range from €280/t for payment at the end of April to €330/t on longer credit terms, while the range in north Leinster is €285-325/t.

Pressure

Quotes for big bags of CAN delivered on-farm show a much larger range, reflecting the upward pressure on price. In Munster, the quotes range from €215-245/t, while in south Leinster the quotes range from €210/t for April payment up to €240/t.

North Leinster quotes are from €205/t for April payment to €250/t on longer credit terms, while Ulster quotes for CAN are from €210/t for cash deals to €240/t for credit deals.

Bulk CAN quotes are currently at €190-€215/t in south Leinster and €200-€230/t in north Leinster.

The IFA price survey showed quotes for big bags of 18-6-12 delivered in Munster ranged from €300/t for June payment to €330/t for longer credit.

The same product in south Leinster was at €305-€330/t and €5/t cheaper in north Leinster.

Quotes for 27-2.5-5 and 24-2.5-10 were limited to Munster. Granulated big bags of 27-2.5-5 were available at €295-325/t, while granulated big bags of 24-2.5-10 were quoted at €303/t for cash deals and up to €330/t for credit deals.

Quotes for 10-10-20 in Leinster differed by €15-30/t, depending on the area. In south Leinster, prices quoted for big bags delivered were €350-380/t, while north Leinster quotes stood at €345-360/t.

The IFA survey also showed quotes for other compounds, including 50pc muriate of potash, which was quoted at €380-€410/t for delivered bags.

Delivered bags of 13-6-20 were quoted at €320/t, based on the payment at harvest time.

A price of €295/t was quoted for bags of 19-0-15+S, delivered on-farm.

The price of 15-3-20 varied by €2/t, with quotes for bags delivered on-farm ranging from €305-320/t.

Finally, €335/t was quoted for 16-4-20 delivered on-farm.

IFA inputs team leader Chris Hayes insisted that farmers who continue to shop around and get quotes from outside their own area were still getting the best deals.

Large growers, group buyers and cash buyers are the most likely to secure fertiliser at lower prices, he said.

However, Mr Hayes added that there were good deals to be secured on credit terms, with merchants offering several months credit at no extra cost.

"Urea remains better value than CAN, with a 33pc discount when the nitrogen content is taken into account," he said.

"Urea costs 60c/kg of nitrogen compared to CAN, which costs 80c/kg of nitrogen.

"As CAN prices continue to rise, grassland farmers should look at the 27s and 24s for better value."

Irish Independent