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Markets affect nutrient cost, supply

Great yields put smiles on faces but also sap soils of nutrients. Many Delta farmers, blessed with high-yielding crops this year, must now look to increasing their operations' fertility. Unfortunately fertilizer prices are rising and international supplies are often dodgy.

“Folks are talking about potash,” says William Johnson, Pioneer field sales agronomist in Arkansas. “Think about our bean harvest. An acre of 60-bushel beans removes around 70 pounds of potassium (1.2 pounds of potassium removed per bushel of soybeans).”

If left alone, such conditions would affect yields. “Potash deficiencies in corn and soybeans lead to significant yield losses,” says Johnson. “Once you see the brown margins and burn from potassium deficiency, 20 to 30 percent of yield can be lost.”

The potash supply has been extremely tight all fall, says Donnie Dickerson, vice president of Jimmy Sanders, Inc., a leading crop input company. That tightness won't loosen, “at least through the spring. We're having trouble getting commitments from suppliers.”

One of the major factors is that Canpotex — the international distributor for three large Canadian potash manufacturers — has increased sales by 1.5 million tons. That's taken product off the market and driven up prices for what's left.

At least one of the three Canadian companies with additional capacity is trying to bring more to market. But it's “too little too late, I think, in terms of getting potash in a timely fashion,” says Dickerson from his Cleveland, Miss., office. “I don't see things improving in the spring at all.”

China and, especially, Brazil have gone heavily into the potash market, forcing the price skyward. In early November, a large deal between Canpotex and Sinochem, China's largest potash importer, was announced.

“China has become a major player. And, in South America, they're willing to pay more and hold that over our heads,” says Dickerson. “It's at the point now where potash is nearly double what it cost last year. Come spring, the lower end price will be above $200.”

How about phosphate? “We've heard supplies will be tight,” says Dickerson. “Production in Florida was kicked several times due to hurricanes. Production is coming back on line, though.”

What about nitrogen? “I've got a lot more gray hair worrying about nitrogen lately, that's for sure,” he says. “Liquid nitrogen will be extremely tight this spring. We've had a lot of production shut down in the United States in the last two years. Natural gas costs, environmental costs, and labor costs are factors that have moved production overseas. This is a world market now, and we're in a competitive situation.

“Something like 10.2 million tons of urea is used in the United States, while our capacity for producing is only around 2.5 million tons. We're becoming dependent on the world market and have no control over it. If someone overseas wants to short the market, we're along for the ride.”

Dickerson “hates” to see the United States be dependent on other countries for crop inputs. “They're so inconsistent. Folks pay close attention to gasoline prices (and fertilizer prices are) more of the same. But besides farmers, the average American doesn't know how shaky the situation is. I hate to see this happen for our country — we could be totally dependent on foreign nations for our fertilizers just as we are on their steel and oil. That's scary and more folks should be worried.”


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