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Are Fertilizers Getting Less Affordable?

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Fertilizer affordability

Last week, the Fertilizer Affordability Index rose compared to last week, indicating that the move in fertilizer affordability wasn’t favorable for purchasers. The index is issued by the Mosaic Company (MOS) and was indexed to one in the base year of 2005.
Fertilizer Affordability 2018-02-26

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Weekly movements

In the week ended February 23, the Fertilizer Affordability Index rose to 0.71x from 0.7x a week ago. We can see in the above chart that the index is already near a recent high of 0.72x and is now right at the average of 0.71x since 2010. An index inching closer to one means that the fertilizer affordability is tightening compared to the key fertilizer consuming crops such as wheat, corn, and soybean. We saw that the NPK (nitrogen, phosphorous, and potassium) fertilizers broadly moved higher last week, which could have caused the index to move higher as well.

While affordability for fertilizers gets tighter on the back of rising fertilizer prices (MOO), the recent earnings of Nutrien (NTR) (AGU), Mosaic, and CF Industries (CF) show optimism in demand for the rest of the year.

To learn more about CF Industries’ recent earnings, read CF Industries’ 4Q17 Results Show Improving Market Environment.

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