Experts: Fertilizer Prices Down

Farmers are benefiting from lower and more stable fertilizer prices this spring, according to Purdue University experts.

“Fertilizer prices have come down substantially in the last year,” Purdue agricultural economist Alan Miller says. “This has had a substantial impact on crop input margins since fertilizers comprise a large portion of those costs.”

According to the USDA’s National Agricultural Statistics Service for the North Central region, between April 2009 and April 2010 fertilizer prices for anhydrous ammonia have dropped by $250 per ton, potassium is down $350 per ton, and phosphate is down $50 per ton.

When ethanol production in the U.S. really took hold in late 2006 and early 2007, it corresponded to booming economic growth and strong demand for crops and energy worldwide. As a result, fertilizer prices rose dramatically.

“Volatile fertilizer prices are difficult for both farmers and agricultural suppliers because it’s not always easy to manage that risk,” says Bruce Erickson, director of cropping systems management at Purdue. “Fertilizers are not traded publicly on an exchange like grains, energy, or stock in a company.”

The worldwide financial crisis added to much lower, more stable fertilizer prices because of weaker worldwide fertilizer demand.

“Fertilizer prices bottomed out last fall and have increased relatively little since then,” Erickson says. “As the price of nitrogen drops relative to the price of corn, the economically optimal amount of nitrogen fertilizer increases. As a result, farmers that may have cut back on fertilizer rates in recent years due to previously higher prices may be feeling a bit more comfortable with their normal program.”

The overall supply of anhydrous ammonia available in the U.S. is expected to be large enough to keep prices in check, but the capacity of the delivery infrastructure has been stretched in some places this spring.

The wet and late 2009 harvest meant less fertilizer went on the fields last fall, and with the early start this spring the distribution system has been tested, Miller says.

Natural gas is used as a feedstock for producing anhydrous ammonia fertilizer, so low natural gas prices also have contributed to more stable fertilizer costs.

“Natural gas prices are low enough currently to give U.S. fertilizer producers a cost advantage for converting natural gas to anhydrous ammonia relative to some of the countries from which we had previously been importing nitrogen,” Miller says.

In the past several years U.S. producers of ammonia fertilizers were at a cost disadvantage relative to other suppliers around the world, and, as a result, more of the nitrogen fertilizer used in the U.S. has been imported.

“It is very possible we will see a decline in nitrogen imports in favor of more production here in the U.S.,” Miller says.

For more information about fertilizer prices, contact Miller at 765-494-4203, [email protected], or Erickson at 765-494-9557, [email protected].

(Source: Purdue Department of Agricultural Economics)

Leave a Reply

Fertilizer Stories

Truck dumping dry fertilizer
FertilizerFertilizer Logistics Q&A: Southern States’ Joe Wlodkoski
May 2, 2016
Joe Wlodkoski, Director of Agronomy Procurement, Fertilizer, Southern States Cooperative, is a 40-plus year fertilizer industry veteran. He is quite Read More
West Central Dome structure
FertilizerFertilizer Logistics 2016: All Clear, So Far
May 1, 2016
After a relatively hairy early start to the spring fertilizer movement season with flooding in Louisiana and St. Louis, things Read More
Young corn plants in soil
FertilizerNutrients For Life Foundation Launches New Environmental Science Supplement For High School Teachers
April 13, 2016
The Nutrients for Life Foundation released the latest resource for high school teachers entitled Feeding the World & Protecting the Read More
Flooded corn in Indiana
FertilizerLa Niña Or El Niño: Both Affect Growers’ Nitrogen Investments
April 12, 2016
Submitted by Verdesian Life Sciences As growers prepare for planting, they will be anxiously checking the weather forecast. Midwest growers Read More
Trending Articles
Eric SfiligojReasons For Hope In Commodity Prices
May 2, 2016
For many months now, the doomsayers have ruled the day in agriculture. Too much supply with too little demand would Read More
Eric SfiligojMissing The Family Ties In Agriculture
April 25, 2016
By its nature, the agriculture market is cyclical. Up and down cycles come and go with a regular pattern. For Read More
HerbicidesHerbicide Resistance In Waterhemp Continues To Grow
April 22, 2016
Twenty-five years ago, waterhemp was virtually unknown to Illinois farmers. Today, the broadleaf weed blankets corn and soybean fields across Read More
Eric SfiligojBiotech Corn Drop More Economics Vs. Consumer Rejection
April 18, 2016
Since their introduction into the agricultural marketplace, biotech crops has steadily grown in acreage in the countries of the world Read More
Crop InputsBayer: 5 Reasons We Disagree With Maryland Neonic Ban
April 12, 2016
We’re disappointed that the Maryland legislature chose not to stand up for sound science and the rights of Maryland’s homeowners Read More
Corn
OpinionChallenging Global Economic Conditions Putting More Heat On U.S. Ag Retailers
April 7, 2016
There it is. That vague, slightly sickening feeling in the pit of my stomach. Things are getting weird out there. Read More
Latest News
Palmer amaranth in soybean stubble
HerbicidesWSSA: Billions In Potential Economic Losses From Uncont…
May 4, 2016
What losses would corn and soybean growers experience if they were forced to eliminate herbicides and other control techniques from Read More
Spray Drift
HerbicidesRoundup Ready Xtend: Silver Linings In Label Delays For…
May 4, 2016
Since 2014, Monsanto has trained more than 20,000 growers and retailers on all aspects of its new dicamba-tolerant system at Read More
Syngenta headquarters in Basel, Switzerland
Crop InputsSyngenta Board Appoints New CEO
May 4, 2016
Syngenta announced today the appointment of J. Erik Fyrwald, currently President and CEO of the U.S. chemistry distribution company Univar Read More
Crop InputsIntrexon Establishes Crop Protection Enterprise
May 4, 2016
Intrexon Corp., a leader in synthetic biology, has announced the formation of Intrexon Crop Protection (ICP), a wholly-owned subsidiary dedicated to Read More
Patriot 4440 Sprayer close up
ManagementFlashing Back And Moving Forward On Spray Drift
May 3, 2016
The potential for pesticide drift remains an unavoidable feature of modern agriculture. Here, too, history repeats itself. “When Roundup debuted, Read More
Giant Ragweed
HerbicidesSurvey Provides Insights On Giant Ragweed In The Corn B…
May 2, 2016
A new survey published in the journal Weed Science offers insights into the distribution and management of giant ragweed, a Read More
Truck dumping dry fertilizer
FertilizerFertilizer Logistics Q&A: Southern States’ Joe Wlod…
May 2, 2016
Joe Wlodkoski, Director of Agronomy Procurement, Fertilizer, Southern States Cooperative, is a 40-plus year fertilizer industry veteran. He is quite Read More
Eric SfiligojReasons For Hope In Commodity Prices
May 2, 2016
For many months now, the doomsayers have ruled the day in agriculture. Too much supply with too little demand would Read More
West Central Dome structure
FertilizerFertilizer Logistics 2016: All Clear, So Far
May 1, 2016
After a relatively hairy early start to the spring fertilizer movement season with flooding in Louisiana and St. Louis, things Read More
BAICOR
CropLife 100BRANDT Acquires Utah Specialty Fertilizer Company
April 28, 2016
BRANDT, a leading agriculture retailer and manufacturer of specialty ag products, has acquired a majority interest in BAICOR, L.C. BAICOR, Read More
Soybean field
Industry NewsVerdesian Life Sciences Adds Vice President Of Business…
April 28, 2016
Verdesian Life Sciences has announced the addition of Marc Treurniet to the plant health and nutrition company’s management team. Treurniet Read More
ManagementBiotech Crops Developments and Millennials
April 28, 2016
Editors Eric Sfiligoj and Paul Schrimpf talk about the latest activities in biotech crops and a major shift in the Read More
Industry NewsNachurs-Alpine, Pathway Biologic Extend Marketing Agree…
April 28, 2016
Nachurs-Alpine Solutions (Marion, OH) and Pathway Biologic (Plant City, FL) announce an extension to their exclusive marketing agreement specific to Read More
MicronutrientsCharah Add Three Warehouses For SUL4R-PLUS Fertilizer
April 28, 2016
Charah, Inc., a total solutions company providing unparalleled service and innovation for the coal-fired power generation industry, announced today that Read More
Spenser Forgey, Yahama Fortix
FungicidesIndiana Farmer Wins Arysta LifeScience FORTIX Fungicide…
April 28, 2016
Arysta LifeScience North America recently presented Spenser Forgey, a grower from Young America, IN, with a new 2016 Yamaha Grizzly Read More
Corn Field
HerbicidesNew Wilbur‐Ellis Herbicide Targets Volunteer Corn
April 28, 2016
Wilbur‐Ellis Co., a recognized leader in marketing and distribution of crop protection products, as well as precision agriculture technology, has Read More
StewardshipNRCS To Help Farmers Measure Conservation Impacts On Wa…
April 27, 2016
The USDA has announced the availability of $2 million to help farmers install edge-of-field stations that monitor water quality as Read More
Planter in Iowa
EquipmentTop 10 Twitter Pics For #Plant16
April 27, 2016
Despite some wet weather in parts of the Midwest, growers and ag retailers are working feverishly to plant this year’s Read More