Good crop yields require adequate applications of fertilizers, to ensure the growing wheat, rice, et cetera, has adequate nutrition to yield a bountiful harvest. For much of 2022, the concern has been that rising fertilizer prices and even fertilizer shortages
As an investor I'm trying to learn more about fertilizer pricing cycles. I'm thinking a cycle is two years, or crop seasons. Year one gives growers a price for a crop. Then, year two, they will buy more fertilizer for the crops that were most profitable for them. Meanwhile the worldwide "war" on fossil fuels has to force the price of fertilizers--especially the kind made from natural gas--higher.
Good and a relief to see those statistics Peter. Around our local rural area crops are very abundant and the growing and harvesting season was just about perfect. Northern Illinois.
One always has to remember that price inflation data especially is a moving target.
Right now the trends are favorable, and hopefully they stay that way. However, if there any additional exogenous supply shocks particularly in energy, these trends could reverse quite quickly.
And as good as the trends are, it would be an extravagant prediction to project a return to pre-pandemic prices.
I am pessimistic that much of anything really goes back to pre pandemic levels with the manipulation of almost everything going on but one must hold on to hope and be aware. You have made me aware of certain sectors whose narrative I cannot really take at face value anymore. It’s confusing. We have to watch our backs for sure these days if you know what I mean.
There are no sectors where you can take the narrative at face value, and I include my own work in this regard. My goal is not to present "the truth" but to present a fuller and hopefully more nuanced view of the available facts.
I use narrative to stitch facts together into a cohesive whole, but that is the limit of what narrative can accomplish. Which is why I encourage everyone to read for themselves, research for themselves, and above all think for themselves.
As an investor I'm trying to learn more about fertilizer pricing cycles. I'm thinking a cycle is two years, or crop seasons. Year one gives growers a price for a crop. Then, year two, they will buy more fertilizer for the crops that were most profitable for them. Meanwhile the worldwide "war" on fossil fuels has to force the price of fertilizers--especially the kind made from natural gas--higher.
Good and a relief to see those statistics Peter. Around our local rural area crops are very abundant and the growing and harvesting season was just about perfect. Northern Illinois.
One always has to remember that price inflation data especially is a moving target.
Right now the trends are favorable, and hopefully they stay that way. However, if there any additional exogenous supply shocks particularly in energy, these trends could reverse quite quickly.
And as good as the trends are, it would be an extravagant prediction to project a return to pre-pandemic prices.
I am pessimistic that much of anything really goes back to pre pandemic levels with the manipulation of almost everything going on but one must hold on to hope and be aware. You have made me aware of certain sectors whose narrative I cannot really take at face value anymore. It’s confusing. We have to watch our backs for sure these days if you know what I mean.
There are no sectors where you can take the narrative at face value, and I include my own work in this regard. My goal is not to present "the truth" but to present a fuller and hopefully more nuanced view of the available facts.
I use narrative to stitch facts together into a cohesive whole, but that is the limit of what narrative can accomplish. Which is why I encourage everyone to read for themselves, research for themselves, and above all think for themselves.
Trust nothing. Verify everything.