October 31, 2007 Agronomy

Fertilizer Sticker Shock?

The decision to buy fertilizer has become a guessing game - not unlike the traditional anguish of when to sell corn and beans.<!-more—>

The days of fixed prices are gone and so are many of the American manufacturers that used to stabilize the market. Today’s market is worldwide and just as unpredictable. Do you know that the U.S. now ranks third behind China and India in fertilizer use? Single contracts for millions of tons of fertilizer aren’t unusual for those countries.
Do you know that the U.S. now imports half the nitrogen (N) fertilizer it uses? Fewer than 10 years ago the U.S. produced 85% of its N, but more than 25 plants have gone out of business and others are idle. Cheaper natural gas has pushed that production to the Caribbean and Arab Gulf.

You probably know average fertilizer prices reached an all-time high in April this year. But, do you know the same thing is likely to happen in 2008? The ethanol boom and the resulting increase in corn acres are part of the reason. A 19% increase in corn acres in 2007 adds pressure to the N market around the world.

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