With higher natural gas prices, almost double from last year, “we have to worry about fertilizer prices going up,” says George Rehm, University of Minnesota soil scientist.
In fact, as long as natural gas prices stay above $5/million BTUs, expect nitrogen prices to be “considerably higher” this fall, says John Douglas, fertilizer consultant from Florence, AL.
Compared to last fall, he predicts you'll pay $100/ton more for anhydrous, $50/ton more for urea and $30-40 more for urea ammonium nitrate. Currently, much of the nitrogen is being imported from countries like Brazil, Russia and Canada.
The volatility of natural gas prices, a major cost in making nitrogen fertilizer, have been rising, says Kathy Mathers, vice president of public affairs at The Fertilizer Institute.
She says the average price of natural gas in 1998 was $2.10/million BTUs; $3.06 in 2000; $3.20 in 2002 and $5.60/million BTUs in June of this year.
The National Corn Growers Association is urging legislators to examine policies that would increase the supply of natural gas. Demand has skyrocketed in recent years because of utilities shifting to natural gas to meet clean air requirements.