Fertilizer demand dropped sharply and suddenly late last year and in mid-January farmers were waiting for a corresponding drop in price. Three large fertilizer companies — U.S. based Mosaic Company, Calgary-based Agrium and Saskatchewan-based Potash Corporation — announced they would cut production of fertilizers. In January, Mosaic Company was the most recent of the three to announced cut backs, saying the company would put the brakes on production of phosphates and potash.

In December, Agrium announced it would stop nitrogen production in its Saskatchewan plant.

Meantime, some inventories are piling up at storage sites because they have no where to go. They are not going to fertilizer retailers because many retailers can’t move existing bags. Many Retailers are caught in the middle between fertilizer producers and farmers with high-priced fertilizer and they don’t want to slash prices for a loss.