Stagnant Supply Stretches, Could Snap

The Agricultural Retailers Association (ARA) offers some worrisome figures for future fertilizer shortages.

In its April 14 edition of ARA Retailer Fact$, ARA says the fertilizer shortage situation "appears to be more troubling" than the organization originally suspected. U.S. retailers and growers need to remember that competition for supply is increasing.

"The sudden international high demand for fertilizer left some American farmers and retailers stunned," says ARA in its newsletter. "As supply numbers remain stagnant, world demand looks to greatly increase." Supply for 2008 is expected to match world demand, but that may not be the case in the future.

"One recent report states that India pre-purchased 100,000 tons of phosphorus, without a specified price. Demands like India’s in the global marketplace are the cause of increases in fertilizer prices," ARA cautions. "Wells Fargo Senior Agricultural Economist Michael Swanson observed that the January nitrogen export total of 193,000 tons represents 27 percent more, in one month, than all nitrogen exported by U.S. fertilizer producers in previous six years. Other inputs such as triple-stacked biotech hybrid corn will likely increase from $75 to $115 per acre for 34,000 kernels planted. A bill for fertilizer could run as high as $200,000 for a 1,000-acre corn operation. The specter of increased international demand should heed a strong warning to American suppliers and farmers."

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