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[00:00:08] Mike Howell:
The Dirt, with me, Mike Howell, an economics podcast where I present the down and dirty agronomic science to help grow crops and bottom lines. Inspired by eKonomics.com, farming’s go-to informational resource, I’m here to break down the latest crop nutrition research, news and issues, helping farmers make better business decisions through actionable insights. Let’s dig in. Well, hello again, everyone. Welcome back for this week’s episode of The Dirt. We’re pleased to have Eric Snodgrass with us today. For everybody that’s been with us for a while, you know who Eric is, but Eric, for those who may be joining us for the first time, if you will, introduce yourself to everybody and let them know what you do.
[00:00:53] Eric Snodgrass:
My name’s Eric Snodgrass. I am by trade a meteorologist. My title is Senior Science Fellow at Nutrien Ag Solutions, and what I do is provide weather analysis and forecasting for our customer growers and just try to understand how weather is going to impact their business, and trying to stay ahead of one side of the risk factor that is baked into trying to grow crops around the country and around the world. A lot of communication. I talk to a lot of folks about what weather did and what it’s going to do. And some days I pretend like I know what I’m talking about and other days it’s just chaos, but that’s the nature of the job.
[00:01:22] Mike Howell:
Eric, let’s jump right in. Last time we had you on, it was fall and we were harvesting last year’s crop, and you told us what to look out for this winter. I think we left it over in the Pacific Ocean. Where was that? The Alaskan Strait or somewhere over that way? You told us to watch out for that area just south of Alaska, that was going to dictate our weather this winter, and talked about the snow. And I’m hearing the Rockies did not get near as much snow, especially in the U.S., as we were needing. Talk about that and what happened in that situation.
[00:01:48] Eric Snodgrass:
This is a good thing to start with, because I think the bigger overarching problem with winter is that we had a lot of fall drought just over winter, maybe through the entire winter. We’ve got a drought monitor today that’s got 75% of the Lower 48 covered in some form of drought. And what’s interesting … we should come back to this in a minute … is guess what everybody’s asking me? They’re like, “Well, wait a minute, this is way more drought than we saw back in spring of 2012.” And they’re like, “Is this going to be worse?” I’m like, “Hold on.” We’ll talk about that, because that’s always going to be a top concern for folks, but here’s what happened.
[00:02:17] Eric Snodgrass:
When we got into winter, the West took off warm. Big heat built into the West at times, and the East got very, very cold. We saw what I would consider to be a more typical La Nina type winter pattern, but it was interesting. You talk about western snowpack. California had three different events that hit them squarely up against the Sierra Nevada Mountains. They’re drought-free. They got 121% of their typical water in their reservoirs, and the Central Sierra Nevada were packed. Yet you go north of that into the Pacific Northwest, not much snow. You get into the Rockies, not much snow.
[00:02:47] Eric Snodgrass:
Colorado Basin, which feeds the Colorado River, hugely important for Western water, infrastructure, agriculture, everything, a 10-year low, maybe even more than that. The North Platte Basin, the South Platte Basin, which feed into the Platte River system, lowest they’ve been since recordkeeping started in 1990. Before that, we’ve looked back and this could be near-record low snowpack in winter for those two. So that’s Nebraska. Then you come down to Kansas, and the issue in Kansas is that the Arkansas River in its snowpack was incredibly low as well.
[00:03:16] Eric Snodgrass:
So the effect of all of this is that we’re just sitting here every day watching the Plains catch fire, strong winds. They’ve even had, mid-March, into March, some temperatures touch 100 degrees Fahrenheit. And then you go talk to some folks out East and they’re like, “This was the worst winter we’ve ever had.” It was cold, snowy. Tons of snow got down south. The Carolinas got blasted with snow. We had two weeks ago, I was talking about three feet of snow hitting Northern Wisconsin and the UP in Michigan. This has been a weird winter, splitting the country at about the 95th Meridian. You go east of it, people are going to remember it as a brutal winter. You go west of it, people are like, “What winter are you talking about? Did we ever finish fall?”
[00:03:51] Eric Snodgrass:
And here we are sitting in this spring trying to understand, well, does it mean anything, and does the atmosphere have a memory? Is it like, “Hey, we’re keeping this going. This is a problem.” And I’ll be honest, there’s been a lot of anxious growers out there just given other geopolitical things that are happening, where the markets currently sit. And what’s interesting, Mike, I’ll be honest, I did I think 85 meetings from November to just this week, and you’d be surprised at the number of folks that are hoping weather’s going to do some supply-side shock in the markets. Everybody, from cotton and wheat to corn and soybeans, the whole gamut, and that’s not even touching what’s going on on the West Coast. And they all want a weather problem, they just don’t want it in their own backyard. They’d like to have it somewhere else.
[00:04:32] Eric Snodgrass:
And I get it, because right now as we look at things, these prices are not where we want them to be. We’ve seen global demand in certain crops okay, but stagnate in others. And here we are going into another growing season wondering, well, what’s Mother Nature going to toss at us and what should we be prepared for? And they’re like, “Hey, Eric, what do you think?” And I’m like, “Watch the Gulf of Alaska.” That’s what you just talked about. Watch that. Watch the Equatorial Pacific as we watch possibly one of the biggest El Ninos in history build. It has the potential, it’s not there yet, but it could be a monster.
[00:04:59] Eric Snodgrass:
And sometimes folks ask me and I’m like, “Listen, I wish I knew what was going to happen on March 27th, I could tell you the rest of the year,” but it unfolds for me the same way it unfolds for you, and I’m just going to be a step ahead of you to let you know what’s going on. But with respect to the weather, there might be some sleepless nights this spring trying to stay on top of this pattern.
[00:05:16] Mike Howell:
Eric, I think you hit every question I had on my list already, but the second thing I had here was the drought, and you talked about that. We did not break the drought this winter. I know the Mississippi River has came up a little bit, but do we have a lot of snow still to melt to get in the river to help refill that river? Or what does the snowpack look like? Do we still have a lot melting? I know we started planting corn in the Lower Mississippi Delta in early March, a record pace planting corn. The corn’s already up and off to a good start.
[00:05:41] Eric Snodgrass:
Well, let me ask you this before you ask me the snow question, because I’m going to tell you, the top question I’ve got in the last two weeks has been all about that Mississippi, Louisiana, Texas and Mexico corn that’s in the ground, because everybody in the Midwest, all we think about is how bad the disease pressure was a year ago with the hot, humid nights, the rain we had in June and July, a lot of hours spent with the leaf surfaces being wet, which is perfect incubation for mold spores, and we battled southern rust. We battled tar spot, and they’re like, “Well, what’s it look like this year?” Well, I’m going to talk to a guy tomorrow that might have a clue about this. I know it’s a little early to be reporting on this, but you’ve said that the crop went in pretty quickly down south with all the warmth, right?
[00:06:20] Mike Howell:
Yep.
[00:06:21] Eric Snodgrass:
Yeah. So there’s going to be a lot of worry about it.
[00:06:23] Mike Howell:
I mean, those are late-season diseases. We don’t have to worry about those this time of year, and it’s going to be hot enough in our part of the world. We don’t deal with tar spot in the South. We’ve got to get this crop in before those nighttime temperatures get up in the 85-degree range and we’ve got to get it pollinated before that, so that’s why we’re trying to get it in early.
[00:06:39] Eric Snodgrass:
I get it. These guys up in Minnesota and Iowa, they’re like, “We know it comes from down there and just gets up to us later in the season.” Okay, you asked about snow, though, so let’s think about it. The problem is the Missouri River. You got the Missouri, you have the Ohio and then the Mississippi. It’s like this holy trinity of rivers that come together in Southern Illinois, and here’s the thing. The Missouri River doesn’t have any snowpack on it. The Northern Mississippi does. Northern Minnesota and then northern Wisconsin, yeah, they’ve got tons of snow up there. The Ohio’s had rain. We’ve had a bunch of severe weather in the Central and Eastern Corn Belt. My home state of Illinois is leading the country with tornado reports right now. Also, hail. We set a new record in the state of Illinois up in a town called Kankakee, just north of me. The hail was this big, massive, massive grapefruit-size hail, so that Eastern corn belt’s had moisture.
[00:07:22] Eric Snodgrass:
I think that the Mississippi down by you will recover in its levels and probably be in halfway decent shape as time goes on. It’s the Missouri Valley that I’m worried about, man. That’s where the drought is anchored. That’s where the dry conditions are. That’s where the fires have been, in Nebraska and Kansas, and that’s why we’re just worried about when that’s going to fill in. And normally it fills in in April and May, but if it doesn’t this year, we’ll be having a conversation about how the western side of the whole Mississippi basin, which includes the Missouri, it’s got the risk of drought, while the east maybe has tight windows to plant a crop in and maybe a little bit too much rain.
[00:07:55] Mike Howell:
If the Missouri River fills up in April and May this year, that’s going to get into the planting time and that’s going to mean delayed planting, because it’s not going to fill up from the snow, from what you’re saying. The only way it can fill up is rain, and that’s going to put the hurt on those guys trying to get the crop in the ground.
[00:08:10] Eric Snodgrass:
And right now, by the way, throughout Nebraska … I was just talking to guys there yesterday … they’re already pre-irrigating fields. They’re like, “We don’t have a crop in the ground yet, but we’ve got to bring the moisture up.” And they’re doing the same thing, by the way, in the Carolinas. I was on the phone this morning with Clara out there in the Carolinas, and we were just talking. She’s Nutrien. She’s like, “Eric, it is so dry, we’ve got guys running pivots right now way before we put the crop in,” and she’s asking about last frosts. The East versus the West are two different stories this year.
[00:08:34] Mike Howell:
Eric, you touched on it, the El Nino that’s coming in. I can’t watch a weather forecast without them saying this may be the strongest El Nino we’ve ever had, setting up for this year. Talk about the El Nino, what that means, and how that’s going to affect crop production this year.
[00:08:47] Eric Snodgrass:
The last part of that question’s key. I can tell you all day long what an El Nino is, but to think that they all have the same flavor is folly. That’s not how they work. If you look across the equatorial parts of our planet, there are winds that come out of the east. We are living in the Westerlies. The Easterlies are down to our south. We call them trade winds. Every once in a while, those trade winds just back off. They slow down and they reverse, and they’re doing that right now. Now, five out of the last six years, we’ve not had this. We’ve had La Nina, the opposite of El Nino, but right now we’re watching actually an epic collapse of La Nina. It’s the fastest that I can remember in my career. And we’re just transitioning over to these huge westerly wind bursts along the equator, and what that’s doing is it’s repositioning the birthplace of weather systems around the world. It’s the equator. That’s where the heat goes.
[00:09:32] Eric Snodgrass:
So what do we need to think about it? Well, is it going to be a big one? By most objective standards by which we forecast El Nino events, we’re going to already say that this one’s going to be strong, one and a half to maybe two degrees Celsius above normal. And that may not seem like much, but over 8,000 miles of open ocean, that’s a lot of heat. Will it be a super El Nino, as you’ve probably seen in some of the news headlines, a Godzilla El Nino? This is just what happens when people want to attach a phrase to something to get eyeballs on it. Yeah, it could be strong, could be a really, really strong one. But to be honest with you, Mike, it’s the position.
[00:10:03] Eric Snodgrass:
If you can imagine in front of me here, I’ve got the whole Pacific. So on one side we’ve got South America, and on this side I’ve got Australia. Where the peak in the middle of the Pacific, the most intense storms set up, will determine what’s going to happen for the United States. It’ll help. If it’s east-based, which means it’s over by South America versus a central base, which is south of Hawaii, or a west base, which is over by Indonesia and Australia, where the peak heating and biggest storms are ultimately determines the position of high pressure in summer in the United States.
[00:10:33] Eric Snodgrass:
Now, current thinking is it’s going to be east-based. That could change in a heartbeat, but that’s what’s thought right now. And the bad part about that is if … and this is a big if … if that’s the case, it tends to plant a ridge of high pressure over Texas. That puts you too close to the ridge. That hits cotton really hard, hits sorghum, hits all the crops down there. You’re talking about 85-degree nights? We could get there in a hurry in Texas if the ridge establishes. All around that ridge, though, we’re going to see storms all summer long. They’re called ridge riders. I hate to say it this way, but if I’m in the I states, if I’m in South Dakota, Minnesota as well, maybe even parts of Nebraska, when we see heat in Texas, we’re licking our chops for storms. That’s just what happens. They go around it.
[00:11:12] Eric Snodgrass:
Now, that’s not set in stone. If that El Nino event shifts around a little bit, it could reposition where that ridge could be, and then you have to add in the factors. So I’m talking about the setup, man. You have to add another factor that if we go cold in the Gulf of Alaska, the ridge isn’t in Texas, it’s in St. Louis, and then we’ve got a problem across the corn belt. But the Gulf of Alaska ocean temperatures aren’t cold right now, and neither are the West Coast temperatures cold right now, which is why I’m worried about Texas. But to be honest with you, Mike, I worry about Texas every single year. Ten different things can be going on, like, “Oh, we gotta watch Texas. We gotta watch Texas.”
[00:11:43] Mike Howell:
But Texas is such a big place. There’s something you got to worry about in Texas anyway.
[00:11:47] Eric Snodgrass:
That’s right, it is, and that’s the case. And they’re a powerhouse in terms of ag production, so we gotta pay attention to them. Now, if you want me to talk to the corn belt guys, I’m going to give you a new term to think about here, though. Since I just said big storms, what could help those really come into fruition in spring? It’s called the Elvis rule. My friend and colleague, Matt Reardon, works for Nutrien, he coined the term. I told him I’m stealing it. We’re going to use it all over the place, but this is Matt’s term. It’s called the Elvis rule. He’s a big Elvis fan. If I’m in the I States or anywhere around that, I’m watching to your north, from Little Rock to Memphis to Nashville. In every major early summer … that’s June and July … every major early summer drought episode that knocked back yields in the midsection of the United States, it began with drought in Graceland. That’s it. We watch it carefully.
[00:12:35] Eric Snodgrass:
Now, I’ve got a ton of rain coming there. There’s a bunch of rain coming in the next couple of weeks. It could really reduce the drought, could be a great thing. If that rain materializes, worrying about a June and early July drought in the I States is off the table, but you’ll be dealing with flooding rains coming down the Delta. There’ll be problems on that side of things if we get too wet in the area.
[00:12:52] Eric Snodgrass:
Now, if we miss, let’s say the models are wrong, or if it rains in April, but then stops in May and the mid-South goes dry and Graceland’s got problems, then all of a sudden we’re going to have a different tune to what summer’s going to be. I’ll stop talking about Texas and start talking about Nebraska, Illinois, Iowa, Missouri, Indiana getting stuck into the heat, and all around the edges of that is where the storms are going to be. That’s what we’re going to be thinking about. You can coin it with me. The Elvis rule, that’s the top thing for the next 45 days.
[00:13:19] Mike Howell:
We’ll have to remember that, Eric. I had never heard that. Heard Matt speak a couple of weeks ago. I did not hear him speak about that. But Eric, basically what you’re saying is it’s still too early to tell what’s going to happen here in the U.S. One thing that I haven’t heard anybody talk about at all this year is hurricanes, and that’s something that I always want to pay a lot of attention to, especially where I live. What does this strong El Nino mean for hurricane potential this year?
[00:13:41] Eric Snodgrass:
Well, here’s what’s interesting. Normally, aligning near the opposite means bigger hurricane risk, and last year, this was amazing. Last year, we actually had a very active hurricane season. None of them hit the United States.
[00:13:52] Mike Howell:
They just turned.
[00:13:53] Eric Snodgrass:
They all turned. They all stayed out, curled around the big Bermuda high, which shifted almost all the way over to Africa. Now, generally speaking, when El Ninos build in, it’s the East Pacific that has active hurricane seasons. We tend to have too much wind shear across the Caribbean, the Western Atlantic and the Gulf of Mexico, and therefore it’s just too windy for the hurricane to build initially. I would have to say that based off that, we would probably be seeing forecasts come out that say there’s a chance of it being a normal to below normal season. Mike, you know this better than anybody.
[00:14:20] Mike Howell:
It doesn’t take but one.
[00:14:21] Eric Snodgrass:
Just takes one. Go back and talk to the folks in Louisiana back in 2020 when they got hit five times. It’s just amazing how that can take shape. So right now, as I think it through, I’m just going to be watching those ocean temperatures in the Caribbean and the Gulf and also in the Western Atlantic. They’re pretty warm right now, and that’s one of the ingredients you need to make bigger hurricanes. I’m going to just be erring on the side of caution right now, but I’ll tell you this. I was talking to my good friend Rocky Corson, down there in Georgia, and he’s like, “Eric, I got guys asking me every day about hurricane insurance this year.” And he goes, “In some years, we buy it and it pays. It’s a smart move. What are you thinking?”
[00:14:52] Eric Snodgrass:
Because he’s thinking the same thing most farmers are thinking. So much right now in terms of what controls the price of our crops is high and the commodity price is low. And he’s like, “Should we invest in this?” You gotta understand something, Mike. I play the better safe than sorry card all the time. I don’t mess around, but it only takes one and he knows it. Hurricane Helene, which went through that part of the country a couple years ago, holy smokes. I think every county in Georgia paid out because of the damage from that event.
[00:15:16] Mike Howell:
Yeah, that was a bad one.
[00:15:18] Eric Snodgrass:
And I think it’s important we don’t forget how bad they can be.
[00:15:21] Mike Howell:
Eric, I think we’ve covered the U.S. Let’s switch gears. You mentioned Australia earlier. What’s all this mean for Australia? How are they looking down under?
[00:15:28] Eric Snodgrass:
They typically worry about drought when there’s an El Nino. That’s the case. But today, as you and I are speaking, there’s a severe cycle … and that’s what they call their hurricanes down there … that’s hitting Western Australia. It’s going to dump several inches of rain right before they go into seeding on winter wheat. There’s pockets of drought throughout parts of Australia in some growing areas, but it’s not as expansive as it has been in the past. But they grow a lot of winter crops and as we go to summer, they go to winter, and there’s worry right now that it’s going to be quite dry. I see it. I produce content for them pretty regularly, and they are quite anxious about what the upcoming next nine months could look like as El Nino builds in, just because historical precedents say prepare for dryness. I told them, “Please be patient,” because the most recent El Nino event, which happened in 2023, did not cause massive drought problems in areas that were predicted to have drought. So they’re all very cautious right now, but very worried. Talking to a lot of on-edge Australians recently.
[00:16:18] Mike Howell:
The next place I want to go is south of the equator. What does South America look like? We always want to know what Brazil and Argentina crops are looking like.
[00:16:26] Eric Snodgrass:
First-crop soybeans is huge. Only problem is it came out wet. They basically had to pull that crop out with heavy rains up north. We’ve seen some delays getting stuff to port, but it’s still a huge crop. It wasn’t as huge as early predictions, but it’s still going to be a record setter. Safrinha crop went in like this. The safrinha corn, 20% of it was planted outside of the ideal window, so a fifth of that crop was planted late. Just like you’re worried about getting your crop in early enough to avoid the 85-degree heat, they’re worried about getting the safrinha crop in fast enough to avoid the end of the monsoon, which ends in late April, early May. They’ve got to get enough rainfall to get them there. Crop reaches maturity and then dries out in June, they harvest it in July.
[00:17:02] Eric Snodgrass:
Well, with 20% of it planted too late, any dryness that we’re seeing in the forecast for April, May and then June more than normal is going to peel back on those yields. And I think there’s a lot of folks out there watching the potential vulnerability of the South American safrinha crop. I’ve already seen two big analysts that I trust a lot lower theirs by two to three million metric tons. It’s still a big crop, but it’s at least lowering it in the direction that’s favorable for the U.S. grower. I think there’s something to watch there carefully.
[00:17:28] Eric Snodgrass:
Argentina’s been a mixed bag all year long. I’ve watched them earlier struggle with drought, then they would get timely rains. I can’t tell you that there’s something down there, some big story in Argentina that just says, “Hey, you better ring the bell and tell everybody,” but I think we should watch the safrinha crop in Brazil most carefully.
[00:17:42] Mike Howell:
And I guess the last place we’ll go today, Eric, what about Europe? I know they’ve got the wheat going to be coming off before long. How does that wheat crop look?
[00:17:49] Eric Snodgrass:
Well, there’s not been a lot of scare around it. They’ve had decent moisture at times in the Russian wheat belt and Ukraine. April’s key for them, just like it’s key for Kansas. So if they’re going to get rains coming up, it’ll finish that crop off and they’ll get a good harvest. Until I hear somebody tell me, or if I see something in the weather that says there’s some sort of story coming out of Europe, I have to say that they’re not far enough away from the averages to start to cause a stir in the markets. I think actually, the folks over in Europe are watching Kansas. They’ve watched Kansas have two major fire episodes. They see that right now Kansas is dry. Every new storm system that comes in keeps going farther east and not getting back to the west. I think there’s more of a discussion where the Europeans are talking about us than us talking about them.
[00:18:28] Mike Howell:
That’s exactly right. Eric, we’ve covered the whole globe today, I think. Not really optimistic about the forecast you’ve given us so far. It sounds like it’s going to be a tough year. We’ve already done episodes talking about how tough the economy is. You’re not brightening the day with the weather forecast so far, but we know that can change at any time. But do you have any take-home message you want to leave our growers with?
[00:18:48] Eric Snodgrass:
Yeah, I’m just going to say this. Here we are at the end of March, getting ready to start April and May. Remember, those are the two months out of the year that have the most intense severe weather. And I want to tell folks, we’ve already seen multiple deadly tornadoes, new record hail, and we’re going to see more of it. We’re going into the peak of that season. So my word of caution today is have modes of action. Have different sources to get access to weather information. Use everything I’ve made, but I would really want you going to weather.gov and listening to the National Weather Service. They’re the best in the business, and you should pay attention to them. The next two months you’re going to be pretty rocky and that’s just what happens this time of year, so be safe. I want to tell folks the most important thing right now is you’re going to be fighting to get a crop in the ground and you’re going to be fighting Mother Nature to get it done, and sometimes Mother Nature can win with just a pretty heavy punch. So be careful out there, and take heed of when the weather says back off.
[00:19:34] Mike Howell:
Great advice, Eric. They used to say Oklahoma was Tornado Alley, and I’m hearing now that that’s moved over to Mississippi. We’ve had several tornadoes in my neck of the woods the last few years, so we pay attention when those warnings come out. Already had a couple come out this year. Thanks for that safety update. We need those reminders. Listeners, we appreciate you tuning in this week. If you will, hang around for just a couple of moments and we’ll be right back with Segment 2.
[00:19:57] Mike Howell:
Farming isn’t farming without questions, and now there’s a place to go for answers. At eKonomics, an entire team of agronomists is waiting and ready to help, for free. No question is too big or too small. Visit nutrien-ekonomics, with a K, dot com, and submit your question with the Ask an Agronomist feature. Listeners, welcome back for Segment 2. We’re doing something a little bit different today. We’re having Jason Newton, one of our economists, in with us for our Ask an Agronomist section. Jason, welcome to The Dirt.
[00:20:29] Jason Newton:
Hi, Mike. Happy to be here.
[00:20:31] Mike Howell:
Jason, our question for today is we know there’s a lot of conflict going on in the Middle East these days. We know that area is vital for fertilizer production, and the Strait of Hormuz is vital to ship not only oil and natural gas, but a lot of those fertilizer products through that strait there. Talk about the impact of that on the fertilizer industry.
[00:20:49] Jason Newton:
Great question, Mike, and obviously it’s a really important region for energy and fertilizer trade globally, and we’ve seen a lot of volatility in commodity prices since the beginning of that conflict. To just put it in perspective, I think the numbers around energy are pretty well known. Around a quarter of global trade of crude oil, 20% of LNG trade, flow out of that region, but it’s also really important for fertilizer, and not just the energy raw materials for fertilizer, but some of the other raw materials used in fertilizer production outside of the region as well. About more than 30% of the global urea trade comes out of that region. And for the U.S., about a third of the offshore imports are sourced from that region of urea.
[00:21:36] Jason Newton:
On the ammonia side, about 25% of the ammonia, merchant ammonia, seaborne trade globally, flows through that region. We’ve seen, because virtually no trade is happening today through the Strait of Hormuz, and we’ve seen really volatile prices coming out of the situation. As we look at the North American market, of course the timing is challenging because we’re moving into the spring application season. I think for the most part, the channel is fairly well supplied for the spring season, but there’s obviously concerns as we get later on in the season with the importance of supply from that region. Then looking at phosphate, Saudi Arabia is an important phosphate producer, making up about 20% of global trade. But for the U.S. market, it’s an important part of the import balance. About half of the U.S. imports come from Saudi Arabia.
[00:22:20] Jason Newton:
And then I mentioned the raw materials, and that’s also an important consideration. Not only have we seen natural gas prices increase, and I’m talking global natural gas, and we focus really on the natural gas prices in marginal regions like Europe, and the main European hub, TTF, has increased from just below $11 MMBtu leading into the conflict to about $17 per MMBtu today, so more than a 50% increase in prices there, increasing marginal costs.
[00:22:50] Jason Newton:
And then some of the regions in Asia are reliant on LNG from the imports to operate their nitrogen plants. India is a great example. India is a large producer of urea. They’re also a large importer of urea. It’s just a big market overall, and about 85% of India’s urea production uses imported LNG as a feedstock. That production is running at reduced rates today and creating uncertainty with respect to the supply/demand balance, as we go into the second half of the year and India’s import season picks up. So just overall, a lot of dynamics at play in the market with respect to global supply and demand, and it’s led to a lot of volatility in wholesale-level prices.
[00:23:31] Mike Howell:
Jason, it’s hard to believe that one little area of the world plays that much of a factor into the whole economy around fertilizer and fertilizer production. Jason, we appreciate you being with us today. We hope to have you back on a regular basis throughout the rest of the year. Listeners, we appreciate you tuning in this week. As always, if you need information on anything we’ve talked about today, you can visit our website, that’s nutrient-ekonomics with a K, dot com. Until next time, this has been Mike Howell with The Dirt.
[00:23:59] Mike Howell:
Hey, guys, if you like what you heard today, do us a favor and share this podcast with someone else. It could be your neighbor, your friend, your crop advisor, or whoever you think would enjoy it. Your support helps ensure future episodes. So please like, subscribe, share and rate the show, wherever you’re listening from.
