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Crop prices push up N use

12/01/2010 @ 3:17pm

WINNIPEG (Dow Jones)--Producers across Canada are expected to increase fertilizer consumption during the next crop year, thanks to strong commodity prices.

David Asbridge, an analyst with NPK Fertilizer Advisory in St. Louis, Mo., said the strong commodity prices should lead to heavier fertilizer usage across Canada.

"It's going to encourage them to not skimp on fertilizer at all," Asbridge said. "They've got plenty of income, and even though fertilizer prices are higher, they still have a real good gross margin in their crop production."

Asbridge added producers in Canada have been cutting back on fertilizer the last couple of years.

"This should encourage them to put on what they need, and it may encourage individuals to put on a bit to rebuild on the fertility they've cut back on the last couple of years," he said.

While prices have been stronger with the increased demand, Asbridge said he thinks the fertilizer prices have hit their peak.

"I don't really think they are going to continue to go higher. Having a really good fall season (in terms of fertilizer prices) is probably going to take some of the pressure off," he said.

"For prices (of fertilizer) for next spring, I expect we are going to see a little bit more production on land than if we hadn't had high prices. What it's going to do is kind of drift through the winter, but I think they will pull back a bit once we see how much product got moved during the fall season."

With fertilizer prices where they are right now, Asbridge said producers should wait until spring before buying any product.

"The situation doesn't bode well for producers to go out there now and start buying product right now at these high prices," he said. "I'm encouraging guys to wait and see. If they haven't booked it yet, then just wait and see what prices are going to do this winter."

(END) Dow Jones Newswires
Brent Harder, Dow Jones Newswires; 204-414-9084; - DJ - Thu Nov 25, 3:12PM EST
November 25, 2010 15:12 ET (20:12 GMT)
Copyright (c) 2010 Dow Jones Company, Inc.

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