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Fertilizer supply, price double hit

As prices for fertilizer rise in the Mid-South, farmers are asking for reasons and dealers are pointing to consequences of a massive corn crop.

Also on the list of factors: an extremely early, sustained planting season and an increase in demand and infrastructure worries that are squeezing supply and straining the fertilizer industry.

“There's definitely a scarcity of fertilizer,” says Donnie Dickerson, vice president, Jimmy Sanders, Inc., Cleveland, Miss. “Urea is very tight, like a lot of other things. It's almost impossible to keep in stock.”

Fertilizer is available on the international market, fertilizer is available.

“Right now, the problem is getting enough barge loads to the Delta. It isn't anyone's fault, it's just that demand is so, so high.” Barges are traveling the Mississippi River as quickly as they can.

“But when you're blowing it out the door so fast there's no chance to build up even a little supply. I do think urea will get even tighter in the next few months. In fact, I think it will get extremely tight.”

The current dearth of fertilizer is “just a timing issue — getting product where it's needed,” says Don Couvillion, district sales manager, Potash Corp. “Unfortunately, you can't say, ‘I'm ordering a barge-load today and it'll be here next week.’ You can't do that now.”

A huge jump in U.S. corn acreage is also playing a significant role.

“The corn acres are chewing through nitrogen,” says Dickerson. “Liquid nitrogen is what we're moving predominantly in Mississippi. In other states, they use urea instead.”

“Corn is competing for fertilizers like DAP and urea,” says Chuck Wilson, Arkansas Extension rice specialist. “Those have increased in price. Several weeks ago, there was a projection that the price for urea and DAP would soon be in excess of $400 per ton.”

At the same time, granular zinc was running anywhere from $20 to $30 per acre. Last year, it cost $10 to $12 per acre. Corn and rice are the two main crops that require zinc.

“Anytime you're facing an input that's three times the former price, that's a substantial issue.”

The lack of DAP or Triple Super Phosphate “is a real concern,” says Nathan Buehring, Mississippi Extension rice specialist. “We're told some should be coming into the state. Last I heard, DAP was going for about $445 per ton — that's very high.”

Mississippi Extension corn specialist Erick Larson has heard some concerns about fertilizer availability, “particularly some of the mixed fertilizer. I've heard that DAP, or diammonium phosphate, was in relatively short supply. I had heard that there were several shipments held up in New Orleans for about a month or so, and that retailers had run out of supply.”

However, this should have little impact on the corn crop because most of the mixed fertilizer for corn went out preplant. “If anything, it would impact the productivity of some of the crops that are planted later, where those fertilizer applications haven't gone out.”

At the time of this writing, Larson had not heard any complaints about nitrogen availability, “although I have heard about nitrogen prices continuing to increase.”

While there's not much of a Plan B should nitrogen not be readily available for corn producers, Larson did offer advice on maximizing nitrogen use efficiency. “Use split applications to reduce early-season nitrogen losses to make sure the plant can use whatever we apply. Apply it in a fashion which does not subject it to loss before the plant can use it, such as minimizing surface broadcast applications of urea-based nitrogen fertilizers like granular urea or UAN.”

Nitrogen accounts for about a third of the crop budget for corn in Mississippi.

Angela Thompson, Tennessee Extension corn and soybean specialist, hasn't heard of nitrogen shortages in west Tennessee, “but I have talked to some producers in middle Tennessee who didn't book any ammonium nitrate early and were not able to find what they needed.

“Of course, we don't have anybody in west Tennessee putting out nitrogen yet, so that may be where a shortage shows up.”

In Mississippi's rice country, Buehring says producers are leaning towards using ammonium sulfate, “if they can even find it. As far as urea, I haven't heard any complaints about scarcity. But I have heard plenty of complaints about the high price. That's an issue farmers are already worried about. We knew that higher fuel prices were definite. But the fertilizer prices have farmers shaking their heads.”

With availability and cost of zinc a concern, Wilson has been taking calls “from consultants asking for alternative inputs because they can't find a particular kind of zinc.”

His advice? “There are several sources, if you can find them. In some areas, zinc kelate is extremely scarce. If you can find it, granular zinc preplant is still the best option at 10 pounds per acre.

“There's also a product we tested several years ago called SuperTel'. It contains 36 percent zinc and is a fine powder, 100 percent water soluble.

“It should be applied at about 2 pounds of actual zinc per acre.”

Couvillion, a veteran in his business, can't remember “a fertilizer season that started in mid-February followed by an open March with hardly any rain. We needed a break — a big rain, a cold snap — to resupply our terminals. But that break never came. Right now, fertilizer might as well be taken straight off the barge to the field. That's how quickly it's running through some dealers.”

At the same time, “our railroad system and infrastructure aren't geared toward handling the current demand in the market. Just look at the situation with barges. Many of those — along with railcars, actually — have been taken out of service in the last few years.

“It has gotten much harder to ensure on-time deliveries.”

Ninety percent of the potash consumed in the United States comes from Canada, where there are labor concerns.

“In early March, some of the workers were ordered back to work. But the strike still hasn't been settled and the workers could go back on strike.”

As for the phosphate part of the business, one positive is “the United States produces a lot. However, in order to keep the phosphate business going, we must count on export sales.”

There has been an “explosion” in world fertilizer demand, says Couvillion. “China, India and other countries are buying it up. And the world demand won't abate — as other countries' standards of living increase they'll want more and better crops.

“We cut back phosphate production because manufacturers were suffering low profits. But all of a sudden, the world demand increased — particularly in India — because there were some problems with plants abroad.”

What about mothballed fertilizer plants in the United States? Could they come back online? “I don't think that will happen,” says Dickerson. “Evidently, the cost factors of producing it elsewhere are less prohibitive. There are a few U.S. (fertilizer) manufacturers, but the cost of natural gas has shut down many others. We've run ourselves out of the business.

“Fertilizer is now a world market, and I don't see that changing. We buy the majority of our urea from overseas. We're very concerned about keeping enough product.”

“Look, we can use imported fertilizer,” says Couvillion. “We are already are. In the world market, it'll go to the person willing to pay the most. But sometimes counting on delivery is iffy and erratic. It's now a totally different ballgame for N, P and K.”

Elton Robinson, Delta Farm Press Editor, contributed to this article.

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