Josh Linville
Appearances
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Well, those were demand-driven rallies. Those were both ethanol-based. They boosted corn pricing. And so everything chased after that price on the way up. And then the second all that demand started to fall out and there wasn't anything left, it's flat. It all fell back down to the ground. Guys, this thing has been going on since late 2020, early 21.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
We're going to assist with this negotiation. People get back to work. It's too important to the Canadian economy.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Today we know workers are going back to work. The negotiations are still ongoing with government help. But there is absolutely still a route out of this where another work stoppage gets put into place. It's not a done deal. Yesterday morning was a fantastic step towards getting back to normal, getting back to some sort of sense of normalcy. We're not there yet.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And you think about how reliant is Canadian everything on rail. They don't have the river systems we have. You think about what kind of trucking capacity it would take to make up for that kind of rail. It's impossible. So it's extremely important, really hoping these two sides can find some common ground and move on with it.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I've seen stuff like that. I'm not sure. I don't know the science behind it. I can't sit there and say it's right and I can't say it's wrong. Obviously, any sort of a stoppage is going to impact it because then you've got to get everything going and that takes time and you've got to make up for the log jam.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So it's not outside the realm of possibility to say, yeah, a couple weeks may be what it is. I just don't quite know the science behind that number. Got it. Hmm.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So I've heard this from a couple different sides. There is a camp that says, and they're looking at it from putting tariffs on fertilizer exports. And of course, the right is sitting there saying, Kamala gets in there. She's just going to do what Biden did. And the Biden administration allowed these tariffs against Morocco and Russia, phosphate to come in.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
They're just going to continue to tear up the crap out of it and block even more supply from coming here. That's terrible for farmers. What they don't sit there and talk about is the fact that China, one of the biggest producers and exporters of phosphate in the world, they had tariffs put on them during the Trump administration. And Trump, if I remember correctly, wasn't above
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
using things like grain sales and things like that to punish, to negotiate with other countries. So I can see either one being tough for the farmer. Unfortunately, the farmer is once again getting stuck in the middle of this political game.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So you can get information around the world on countries' imports and exports data. And so we gather that. That's a very important piece to know how far ahead or behind you are. That gives you a sense of how the market is going to react. Let's face it.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
If we need to buy 5 million tons, for example, and eight months into the year, we've only brought in a million, you know, we're going to start playing catch up. And what does that mean? We're probably moving to a premium versus the rest of the world to try and call those tons in. So We track this data really, really closely.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And with China, if you look at their urea exports on an average here over the last several years, somewhere between 5 to 5.5 million tons. January through July of this year, cumulative, total, 200,000 tons.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
That's it. That is what the data is showing. So is the data accurate? Yeah. We believe it is, as best as we can tell. Now, that's always a question mark. Just as much as we see operating rate indications, and it's continued to show that urea operating rates have been very, very good, so that makes you kind of wonder, now, wait a minute.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
If they're that far behind on exports, but their operating rates are good, where's all this product going? That's a big missing piece of the puzzle. As of right now, the data that we're looking at, usually exporting 5 to 5.5 million tons by the end of December through July, 200,000 tons.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Well, that's the problem. I would sit there and say, yeah, I could sit there and if I put my tinfoil hat on, I could conspiracy theory and say that Chinese... Government people are restricting the exports of dairy in order to drive the price higher to hurt the food supply to mess with the rest of the world. That's the tinfoil hat conspiracy theory side of it.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
But the data is showing the operating rate is really, really good, and the exports are really, really bad. Now, I found some articles where they talked about how their government officials have actually been pushing to very quickly build storage for a lot of these different rare products. elements and stuff like that, they're stockpiling a lot of stuff. Maybe they're doing the same thing on Yuri.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I mean, my gosh, they built the hospital in like 10 days when they needed it. It's not outside the realm of possibility to think that they could just be building flat storage with a roof on it just left and right. We need to hire those guys for the school. For the school.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Supply side, things seem to be okay. And that is not to sit there and say there are not production issues. The Chinese exports is certainly a situation where we look at urea. The EU is a marketplace that we haven't typically talked about in the past because they just produced what they needed and nothing really went in or out or anything. They were just as they were.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
The same thing, we go back and we talk about Russia and Ukraine. You remember the Nord Stream Pipeline? Somebody blew that up. They stopped shipping product through the... Well, their natural gas price started to rise. Their nitrogen production right now is about 75% of normal. And this is especially bad on UAN. The EU region, about 30% of all the UAN produced in the world.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So that's a little bit of a step back. You talk about some of these production issues we've seen in Trinidad and Egypt because of a lack of gas supply. Russia not exporting anhydrous. That's your biggest exporter right there just disappearing from the marketplace. So there are these hiccups.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
There's enough things that if we saw corn back to last year's type values, I think every single nitrogen price across the board is higher. The problem is the buyer is sitting there saying, I don't care what the outlook is. 24 stinks. 25 stinks. I don't have money to spend anyway. If I did, I wouldn't give it to you to save my life. I'm not doing a thing. The farmer says that.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
The retailer is sitting there saying, I'm in a bad spot. I'm scared to death of this just like everybody else is. I'm not going to take the positions. The supplier is saying, I'm not going to take those positions. It's a standoff. And so we're seeing prices relatively flat. A little bit of a slide on a couple of the products. Anhydrous is moving up a little bit on the resupply. UAN is steady.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Urea is down a little bit. but the market has just grind grinded to a halt because nobody wants to take the next step. They can't last forever. They can last for a while. It's only August 23rd. Do you buy yours yet?
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
That's a lot of it. I would say, so again, one of the big things we talk about, if you've seen Twitter, the reports, things like that, I always talk about the ratio, right? And for anybody that might not know, that whole concept comes from when I kind of break down what farming is from my perspective, just looking at marketing. So this is a very, very, very simplistic point of view.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
It's a lot like manufacturing. And you go to a manufacturer and you say, well, how do you do your stuff? How do you do your inputs and outputs? Well, they're not trying to call the low the inputs. They're not trying to call the high the outputs. They're just sitting there saying when that value between the two of them gets to a good level, I lock them in.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And it doesn't matter where they're at, right? It doesn't matter if your input is insanely high priced or the other side is insanely low. Now, we'd love to hit both of these two, but they're trying to look for that value. And so that's how we track it. We just basically sit there and say, I'm looking at like December Chicago corn.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
We have never seen a high-priced market like we have for this kind of length of time. And it's not just fertilizer. It's grains. It's everything across the board. It was crazy. Kind of easy, kind of exciting. Things were always happening. Every time you picked up the phone, there was some crazy black swan event. It always seemed to help out our situation. Now we're in the great reset.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And I'm looking at New Orleans, Louisiana fertilizer because that's the most liquid point that we have in the North America marketplace. So I look at it from, well, how many bushels of corn does it take to pay for a ton of urea, UAN, anhydrous phosphate potash?
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Because I've yet to walk into a room and say, okay, well, you guys, if you had the chance, would you rather spend 50 bushels of corn to buy a ton of urea or 100 bushels of corn to pay for a ton of urea?
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Does it matter what the price is?
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So that's why we look at it that way. If that value gets low, it's a good value. If it gets high, it stinks. And when you look at urea, UAN, it's middle of the ground. It's not terribly high. It's not terribly low versus historical values. Anhydrous is starting to bump up there on the higher side.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
We weren't too concerned about fall anhydrous demand, but it's starting to kind of creep in a little bit.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
If we have, we've never been set up emotionally like we are. And what I mean by that is we've seen big spikes, right? I mean, you guys were here for 2008 and you saw grain spike up and fertilizer price spike up. And what happened immediately after? It all came crashing back down. We saw the same thing back in what was 11, 12, I think it was. Same thing, prices up and they're immediately back down.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Well, those are demand-driven rallies. Those were both ethanol-based. They boosted corn pricing. And so everything chased after that price on the way up. And then the second all that demand started to fall out and there wasn't anything left, it's flat. It all fell back down to the ground. Guys, this thing has been going on since late 2020, early 21.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
We have never seen a high-priced market like we have for this kind of length of time. And it's not just fertilizer. It's grains. It's everything across the board. It was kind of easy, kind of exciting. Things were always happening. Every time you picked up the phone, there was some crazy black swan event. And it always seemed to help out our situation. Now we're in the great reset.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And great resets never happen because your input prices fall. It's always the other way around. It's always the grain prices go down. Then all the other inputs are like, boy, that stinks. I ain't going to drop my price.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Phosphate is probably the exciting one. Potash is boring, but then again, potash is the biggest one. impacted by the whole Canadian rail strike, so Let's hit phosphate go for it. All right Phosphate is going to be the toughest market out there because you just talked about nitrogen Can you you take a scalpel to it and change a little bit there and a little bit here?
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Absolutely, you can't take it a hatchet to it Phosphate there are guys who are talking about taking an axe to it The price is very very high The price in relation to grain price is extremely high. And a lot of guys have been putting on pretty good rates of phosphate here for the last few years.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And they're saying, I think if I go soil test right now, it's going to show a large amount of phosphate in that soil. I can cut back. Or, even if I can't cut back, there's nobody holding a gun to my head right now that says I have to put it on this fall. Maybe I just drag my feet until spring. Maybe something comes out of it better suited than where we are today.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Unfortunately, there's a couple global events. one being India, the other one being China, that spooked me that we haven't seen the worst yet.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Talk more about that. On the China side, similar to urea, now not quite to the extent of urea, but kind of like urea, they have been scaling back these exports. They're still letting some stuff go, but it's not near to the extent, not near to the levels that they would historically do. And China, historically speaking, is the largest phosphate producer and exporter in the world.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So when your biggest exporter starts slowing down, restricting those exports, you're going to feel it on the supply side of the S&D. The flip side is India. India is your world's largest buyer, not consumer, but buyer of phosphate. Now, if you remember back in 21, I think it was, Indian farmers started to like riot.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
You know, ransacked retail locations lost their mind because phosphate inventory levels dropped down to the lower 1 million ton range. Indian farmers don't truly see world replacement like the rest that we do. They have a flat price.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
The importers have to buy the market price, and the government creates a subsidy to help fill in that gap so that they can bring in the product, blow it out to the farmers. The government subsidy has not been big enough to allow them to bring that product in and lose money. And who's going to buy tons just to go lose money and ship to the farmers?
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Their inventory levels July, August is believed to have gotten down to about 1.5 million tons when it would normally be about 4 million.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So, the thing that keeps me up right now is that you have U.S. farmers who are sitting there saying, I'm going to stick it to the man. We're going to have a terrible fall. We're going to shove that supply back in the system. That's going to create prices that are going to go down. And you could be right.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
But when your world's biggest exporter starts to scale back on what they're sending out to the world, and your biggest buyer has to play catch-up on government subsidy money, that is a dangerous, dangerous game. And
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
We could sit there and see where our prices slide a little bit, but if that world price starts to go up and everybody's like, I'm not going to buy it, what do you think the manufacturers and traders are going to do? Okay. Wave bye to the ship as it darts off to the east across the horizon, guys.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Yeah. And if we were to say that same thing about nitrogen, 100%. Who has some of the cheapest natural gas prices in the world? We do. We could produce some of the best economically produced product in the world, some of the most sustainable product in the world, because we are adhering that to U.S. and Canadian laws and restrictions. We could do it here. Phosphate's a different beast.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Phosphate, you need to have phosphate rock. And you don't just find that anywhere, everywhere else everybody would already be doing it. Tremendous amount sitting down in Florida. But the problem with Florida is phosphate mining doesn't even break into the conversation about importance. People go to Florida for three reasons. The Florida economy runs for three reasons.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I lived down there for a little while in Tampa. Didn't have to pay taxes, stuff like that, because the tourism. People go down there to watch rockets take off. I got a chance to do it. Phenomenal if you guys get a chance. People do it to go down to swim in the ocean. And people go down to see Mickey Mouse. And they bring a lot of money.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Huge fan. I'll be back down in January for my 15th marathon race in a row.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Actually, this will be my 12th year. I've done every one of what they call the Dopey Challenge. It's a Thursday, a 10K on Friday, a half marathon Saturday, and a full marathon Sunday.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
26, 39...
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
42 what is that 50 miles that's how people practice for a marathon let's run a half today just for the practice 48.6 miles and that doesn't include walking from the parking lot to the start line from the start line back to the parking lot the one year i wore my watch i started it stepping off the plane and i stopped it getting onto the plane i covered uh it's like 115 miles oh my gosh
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
You've got environmentalists that continue to push against it. When you produce phosphate, a byproduct is gypsum that's got this really, really slight radioactive tinge to it. And you've never been allowed to do anything with it, so you've got to make piles. You go to Florida, the only hills you see are these gypsum stacks. Well, Florida also has a lot of sinkholes.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Several years ago, there was video. A sinkhole opened up right in the middle of it during a big, big rain. Water had pooled up in the dikes of it. Well, what did the helicopter do? Video of that water rushing in. What did the headlines say? Radioactive water works its way into the water supply. Here recently, a gypsum stack near the Tampa Bay had broken, released into Tampa Bay.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So the environmentalists have a field day with it. And then you talk about how quickly Florida is growing from a population standpoint. Well, do you want mining or do you want people living there? So it's just really Mosaic, the biggest producer down there, They're just getting hemmed in on all sides. They're not allowed to really expand their operation.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
There's more phosphate rock down there, but the other side's winning.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I was going to say, it's because that radioactive tinge, you can't put it on the field.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I think eventually, whenever you're done with the mine, you've got to fill it back in. You've got to reclaim it. So there's probably a little bit that goes back to it. Here in the last 6 to 12 months, there's been legislation that is going to allow them to use that in the construction of roads. And they basically said, listen, Tinge is so, so, so small. It's not a health hazard.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Yeah, we don't want it in the food supply. We get it. But we can use it in other industries. And so they're going to start using this for road creation and things like that. That's going to help them chew down on the piles that are out there. But it's still just – it's a byproduct they have to figure out. It's not easy.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Yeah, for the most part. I think I've told enough horror stories on phosphate. I hope that's it.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Yeah, if you're wanting to finish up the fertilizer products with a good story, potash is it. Now, of course, potash prices rallied significantly late 21, early 22. We thought we were losing Russian exports of potash, Aramajor exporter, Belarus. They, of course, opened their borders to Russia to send troops across their southern borders so they could attack Kiev, Ukraine from the north. And
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Because they're landlocked, they would produce all this potash and they'd ship it through Lithuania and out to sea using their deep sea ports. But Lithuania is a Western country, and they didn't care for the fact that Belarus opened their borders to Russia and allowed them to do that.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So I think it was February 1, 2022, the Lithuanian government signed a decree basically shutting the borders with Belarus. They took all their property, they took all their infrastructure, all the stuff that was within Lithuania, and shut everything down. One of the biggest potash exporters in the world just dropped out of the air. Now they've been starting to kind of find their way back.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
They're shipping a lot more stuff like Russia and over to China and different places like that. So they're now starting to come back. Russia, we thought we were going to lose them. Not only do we not lose them, they're actually exporting more on an annual basis than we've ever seen them do. And then you start to talk about all this new production. There's a new mine going in at Canada.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
They're continuing to expand. It's going to be massive. Russia is continuing to build more product. China is investing in Laos to increase their operating rates, produce more products so they don't have to buy nearly as much from Canada.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So the list goes on, but basically what it comes down to is as we look forward, potash is the one input that we can sit there and somewhat confidently say, we think supplies are going to be solid. And a market that has more than enough supply, prices stay tame, prices stay low. They stay engaged with the marketplace because they don't want to lose any demand. They need all the demand they can get.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So get that price down where it needs to be.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Well, it's the Canadian rail strike. There are still logistical things we've got to watch, right? I mean, if that thing were to occur and it happens over the course of, say, like a month, I don't think it would ever occur. But if it did, imagine what that world looks like now because Canada is your biggest producer in the world.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
You shut down the supply, you're talking hundreds of thousands, not billions, tens of millions on an annual basis. Do we have any potash mines in the U.S.? We do. They're not very big, though. Not nearly enough to take care of demand that's here.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Yeah, it's finally had a good spell here. Seems like all the rest of the world's kind of been filling in the gaps. And, okay, if you're not going to have any problems, we'll give you some. But yeah, fortunately, river systems have been running really well. Rail is running about as well as you can expect it to. Everything seems to be firing all cylinders right now.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Depending on the mine that it comes out of, it's just the analysis of the product. 60% or 62% potash. Okay. Okay.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Not really, because that's more of a specialized product. When you look at it, at least your things like DAP and MAP and urea, UAN, all of those are traded around the world. So it's much easier to kind of build a case. Your micros are going to trend along with those major products, but at an elevated rate because they are specialized. You can only buy it from here.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
It's only this brand of it or whatever it is.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
It seems to me like, again, been in this industry for 20 years, it seems to me as though sulfur has become a bigger and bigger part because, A, we're raising a bigger crop. Bigger crops pull every single nutrient out of the soil. And, B, we cleaned up the air.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
You don't have that sulfur coming from the rain anymore like we used to do.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Sulfur is the one... It's kind of an amount of time that we have to put towards everything. Right now, we focus on nitrogen phosphate potash. Sulfur will be the next one we do. We're just not quite there yet.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
There you go. You can start tracking it.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I think for the most part, things will stay relatively steady now until partway through harvest. And I say that from a potash, phosphate, and hydrous perspective because by that point, it's too late. If we're going to put stuff on the fall, we have to get that done. And plus, a lot of world demand starts to open up about that time. We're
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
August is about the quietest period of the world as you're going to find. It only goes up from here in theory. And as we get to next year, unfortunately, I'm going to say this, a lot of the audience might be a little upset with it, but the market is looking at it and says, I don't really care what the profitability of the farmer is. I care about what the acre mix is next year.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And unfortunately, from that standpoint, they're basically looking and saying corn is going to be 90 plus million. Wheat is going to be solid. The demand to grow those crops is significant. If S&D is tight, we are going to keep our price up. Effectively, if we don't have enough supply for the demand we think is going to be there, raise the price until we kill some out and destroy some demand.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
That's the cold-hearted nature of the marketplace.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And that's the problem. If we were on an island of our own, if it was just the U.S. market, I think if we hold out for a few more months, we'd probably start to see that happening. But the problem is the rest of the world continues to have all these issues.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So if the American farmer sits there and says no long enough, even if our price does dip down, if the rest of the world stays up, they'll just start loading vessels and soon have to see. And that is where it gets very dangerous to only focus on us from a U.S. perspective. Trust me, I have to fight myself out of having blinders on just as much as everybody else.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
At the end of the day, we're part of this world market. You know, phosphate's a great example. We could cut our application rate, stick it to the man, have double-digit percentage demand destruction on it, but if the world stays as tight and demand stays as solid as it is, we could still see our pricing up, regardless of the fact that we really showed them what we were all about.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
My advice is always to watch that, what's my fertilizer price in relation to the grain price. Phosphate, let's go back to last summer on the phosphate. Price has dipped down pretty well. And I can tell you at the low end of it, I thought it probably had another $25 to $50 a ton downside. At the same point, corn looked good.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Corn price was going up, and I thought, hey, they're going to continue to go up. So the ratio is really good. In fact, it got down to some of the lowest 25% range values that we've seen over the last half decade to decade. I thought phosphate was further down. I thought corn was further up. Let's wait and see what happens. But that value was there. And that's when I think we need to jump in.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And those numbers are going to look different for everybody out there. And that's where we have to kind of work with our suppliers. Hey, can we run these type of numbers? I can get the historical grain prices from the elevator. Can we overlay that with your historical fertilizer price? And then you can create a graph that sits there and says, hey, when I get to
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
50, for example, that's a good value. If it hits 50, I need to do a layer. I don't care what the grain price is. I don't care what the fertilizer price is because that is a value there. And that's the thing. Last summer, when I look at it from a NOLA Chicago perspective, the ratio dipped to 80. And that was a heck of a buy. We started jumping up and down saying, guys, opportunity.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
This is a big one. Today, that same ratio is 125. Whew. Almost 50 bushels more to pay for a ton of DAP than what it was last summer.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I will say on that post, the one thing that I didn't explicitly say, but I hope the younger farmers kind of took away from that, all that advice is coming from guys who went through the 70s and went through the 80s. That was a pretty tough time. They're still here. They're here to give you the advice that they gave you, and there's a lot of good, sound advice. They're still alive, guys.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
You said it's cyclical. You're absolutely right. There will be better days ahead. This is just a tough spot. We'll get through it. Just keep your emotion out of the marketing, take your wins where you can take them, and just get on down to the next road.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I've done a terrible job of it. Um, last few years, it's taken quite a bit to get this thing going to what it is today. I've, I've put way too much work in. I've missed a few things at home. I probably shouldn't have. And it's, I say that so openly because my oldest just started his senior year. Realization, he's going to college next year. He's out of the house.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And I finally decided I've got to stop that. I've got to find that balance again. So when I shut down, I put my work phone on the shelf, I put my computer in my bag, and I walk away from it. You've got to make it a priority. You just have to. Because trust me, it goes fast. It'll be over before you know it. The kids will be out of the house, and all of a sudden...
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
It's just you and the missus, or maybe just you. But you have to make it a priority. You just got to sit there and say, these are my hard and fast rules, and I will not break them.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
They can go out, Google StoneX Farmer Fertilizer Newsletter. And I can tell you the next edition is going out next Thursday, Friday. And all that is, is just that was my attempt to try to get more information out there, right?
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
You can only do so much on X. You can only do so much on like YouTube videos, but this is kind of my way of, to your point you said earlier, it's kind of just like a mind dump. That's exactly it. It's kind of going through what happened in the last 30 days of the marketplace. What do I think is going to happen right now? I don't know.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Sure, you think I'm doing all this job if I know exactly what's going to go on with the marketplaces? I can work a lot less and make a lot more money than what I'm doing today. But just try to give a little bit of insight, some of the price movements, things like that. So you have to go Google that, take them straight to the registration page.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And great resets never happen because your input prices fall. It's always the other way around. It's always the grain prices go down. Then all the other inputs are like, boy, that stinks. I ain't going to drop my price.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So every month I update every single one of them, like, uh, on the urea newsletter, I've got urea versus corn. I've got urea versus wheat. I got urea versus everything out there, everything I can think of. And frankly speaking, if people will come back to me and say, Hey, you're missing this, this is a future straight market on the grain side. We could do that comparison. Easy enough.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
We'll put it in the system. We'll put it in the newsletter. We'll do it. But yeah, every single month we will update those. And at that point, I don't like telling farmers what I think they ought to do. I will point out opportunities. It's not my place to make a decision for somebody. Because I'll have people, should I buy this? I don't know. I don't know your operation.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
I don't know your risk tolerance. I don't know your ground. I don't know your territory. I'm here to try and give you more information so you can make that decision. At the end of the day... If it's a right decision, I don't get any of the income. If it's a wrong decision, the banker's not coming to me and saying, hey, let's talk about settling this account up.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Anytime, guys. Thanks for having me on. Sure appreciate it.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Yep. Back when tobacco was still a little controlled by the government as far as what you could raise and you could actually make money at it.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Yeah. So the role that I have, at the core of it, StoneX is a brokerage firm. So our whole thing is trading futures, trading grain futures, interest rates, currency, fertilizer. And that's what they brought me on, is that fertilizer is kind of an up-and-coming futures market, trading urea, U-A-N-D-A-P. But
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Once I kind of started to settle into the role, some of the things that bugged me over 20-plus years started to kind of filter through my head, and that's the lack of information on the fertilizer side. I mean, let's face it. Most of the listeners are probably sitting there with their operations looking. The biggest cost per acre is fertilizer. What do you know the least amount about? Fertilizer.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
That's not okay.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
kind of took a little bit of the role i'm no longer beholden to like manufacturers or anything like that it's kind of like no we want to get the information out there we want farmers to know a little bit more about what's happening may not change a single thing that they do but understanding that hey china did this and it affected me here and russia did this so that affected me here at least having a little bit better of a sense of what's happening around the world puts another piece of the puzzle in there and if it hate it turns out it helps them buy a
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
They are. My dad is. My cousin is kind of starting to get into it. My cousin actually graduated from high school, straight out of high school, went to Nebraska, did the John Deere Mechanic School, and came back immediately working up around the St. Joe Atchison area.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
and kind of getting into it that's just really not been my bag I've kind of enjoyed this role a little bit more so didn't take over the family farm like I probably should consider but I'm having too much fun doing this but yeah we uh a couple thousand acres up of northwest Missouri just south of St.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Joe and yeah it's no longer tobacco anymore um that's kind of moved on the government stopped the program I got out of the cattle business so my dad could have a little bit more free time but Still doing the row crops.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Huh. You take your leaf bales. and all the companies come in, and they literally just go one by one and auction each one of them off and just go straight up and down the line.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
as of about two years ago. Russia. Russia. Guess how many tons they're exporting right now? Zero. Wow. Because their pipeline that they would run down to Odessa, it kind of goes through Ukraine.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And I'm going to guess, I don't know how many times you've studied a war, but the nation that's being invaded isn't real thrilled about letting them use a pipeline to go make money off of an export like that. So that pipeline has been completely shut down. Russia has been trying to build new ports within Russian territory and But it takes a long time to build that stuff. So, yeah, you've got that.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
You've got Trinidad production issues. I will say I've gotten that question a lot. Why is it more expensive this year than it was last year? And I'll tell you, last year's price was a gift. And what I mean by that is it was much, much lower than anybody anticipated. It was to the point where I started to hear the price and I called my dad. I was like, hey, dad, how's it going? Yada, yada, yada.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Buy your anhydrous. Well, I don't have a price yet. Buy your anhydrous. well, what price do you think I should buy? I said, buy your anhydride. Take what they tell you and you buy it. When you look at that price versus where the corn was, to your point, it was five plus dollars a bushel. One of the best ratio values we've ever seen in the history of the data that we have.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
That's one of the big things we always kind of get into is one of the things we try to educate is I don't like flat prices because every time you see a flat price, it's never low enough. You know, there's not a fertilizer price low enough. There's not a corn price high enough.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Well, it depends on the product. So it depends on if we're talking nitrogen, phosphate, potash. If we're looking at nitrogen, we are a net importer. We don't have enough production here in North America to meet the demand. We still need to import it.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
If you look at, say, like urea, for example, we typically import around five to five and a half million ton over what we produce because we can't make enough of it. Phosphate, that was the argument. So you talk about the sanctions and things like that. So one of the big talking points back in 2020 was,
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
on this countervailing duty case against Russian-Morocco imports, was we can produce enough in the States to take care of North American demand. Everybody's like, okay, cool, we'll go with it. Well, that was great if their production rates had stayed high. Unfortunately, since that point, production rates have fallen pretty decently. We've been seeing 50%, 60% versus what was normally 80%, 85%.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
And Potash... We've got more than enough potash guys, not in the U.S. specifically, but Canada. They are the biggest producer. They are the biggest export. It's not even a close second. It's good to have those guys to the north of us.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
Yeah, that's kind of a key point of that. It'd be really nice if we could not have that happen.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
So the rail workers for the CN and CP, two of the biggest rail lines up in Canada, they also dipped down to the U.S. Their workers have been threatening a strike. They've been negotiating. And from what I understand, this isn't a pay strike. This is like a safety and you can't force relocate us and things like that. And so the union has been saying, no, you need to come to us.
Farm4Profit Podcast
Josh Linville - Fertilizer Market Breakdown: Nitrogen, Phosphate, and Potash
You need to come to us. And the rail line, of course, is saying we're not going to do it. And finally, as of midnight, would have been Wednesday night, Thursday morning, official strike, official work stoppage. CNN and CP both blocked like, what was it, 9,000 workers between the two of them from coming to work. But within eight hours, Canadian government said, nope, we're going to send people.