Potash vs Corn/Wheat/Soybean

Prices for corn, wheat and soybeans all plummeted from record highs last year, reducing growers’ incentive to boost yields.

“The potash companies are cutting production to prop up their prices, and we’re cutting our usage to bring them down,” David Kruse, president of CommStock Investment Inc. in Royal, Iowa, and a grower of corn and soybeans on 640 acres, said before the results were released. “It’s a battle.”

While the company’s potash prices were higher in the first quarter, solid phosphates fell 48 percent to $342.75 a ton, and the average price of ammonia and other nitrogen-based products slid 40 percent to $226.69.

North American farmers are on pace to reduce fertilizer use to levels from the 1982-1983 growing season despite planting 37 million more acres of corn and soybeans, the company said.

“This scenario is unprecedented in magnitude and unpredictable in consequences,” the company said.

Doyle said reduced fertilizer use is contributing to lower crop yields in Brazil and Argentina and may lead to a “grain crisis” as the world emerges from recession.

“You could see dramatically higher grain prices going into this fall,” he said on a call with investors and analysts.

“A dangerous game is now unfolding around the world,” Doyle said.

Potash Cuts Forecast After Sales Reach ‘Virtual Halt’ (Update3) - Bloomberg.com: