High cost and demand for fertilizer scares farmers

…In part because of a global surge in demand, the price of fertilizer has skyrocketed 228 percent since 2000, forcing U.S. farmers to switch crops, cut back on fertilizer or search for manure as a substitute.

Wholesalers and retailers are scrambling to find and buy fertilizer and juggle what supplies they have to meet customers’ needs. Between 2001 and 2006, global demand jumped 14 percent, an amount equivalent to the entire U.S. market, according to The Fertilizer Institute, a Washington D.C.-based trade group.


“We’re trying to get as much as we can and get it into storage,” said Joe Dillier, plant, food, markets manager for The GROWMARK System, a farm cooperative based in Bloomington, Ill. “It’s hard to buy as much as you want forward because everyone sees that this price is going to continue to go up.”

The price increase means the cost of fertilizing an acre of average-yield U.S. corn rose from about $30 to $160.

Mike Duffy, professor of economics at Iowa State University who closely tracks the costs of crop production, said the more expensive fertilizer might increase the price of sweet corn this summer. And if enough farmers change over to soybeans, it could cause some localized shortages of sweet corn and increase the price of corn in grain markets.

The demand for fertilizer has been driven by an increasing world population and a growing middle class in developing nations that wants more grain-fed meat and more diverse diets. In addition, many U.S. farmers continue to use large amounts of nitrogen fertilizer on their corn because the crop’s market price remains high and they feel they can still make a profit.

The stronger demand has helped raise fertilizer prices, combined with a weak dollar and soaring energy costs that make producing and transporting fertilizer more expensive.

The United States has lost more than 40 percent of its capacity to produce nitrogen fertilizer since 1999 because of the high cost of natural gas.

AP