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Nitrogen prices higher at season's start

LITTLE ROCK — The price farmers pay for fertilizer is always a concern at the beginning of the season. This is especially true for farmers who grow crops that require large amounts of nitrogen fertilizer such as corn and rice.

The price for nitrogen fertilizer is probably 10 to 15 percent higher at this time than it was at this same time last year, said Leo Espinoza, soils specialist with the University of Arkansas Cooperative Extension Service.

"Everyone wonders if prices are going to stay high or increase more between now and the start of the season," he said. The answer may lie more overseas than at home.

Espinoza said natural gas prices affect nitrogen fertilizer production costs and the price manufacturers charge. Since natural gas prices are high, it would be expected that fertilizer prices would also be high. However, 75 percent to 80 percent of nitrogen fertilizers used in Arkansas are produced overseas, so the bulk of nitrogen fertilizer farmers use might not be affected by U.S. natural gas prices.

Potash fertilizer used in the United States is produced in Canada, while phosphate fertilizers are mainly produced in the United States. They’re used in lesser amounts than nitrogen.

Espinoza noted that many farmers have already booked their fertilizer for the 2004 season, so additional price increases won’t affect them. He offered advice for other farmers, who will be purchasing fertilizer in the near future.

First, beware of deals too good to be true.

Most farmers think in terms of dollars per ton of fertilizer, he said. For instance, urea, a common source of nitrogen, was recently selling for $245 a ton. Farmers should get used to figuring fertilizer in cents per pound. This would mean urea would be 27 cents a pound, ammonium nitrate would be 33 cents a pound, and ammonium sulfate would be 42 cents a pound.

"Last year, several products were being marketed with an attractive price based on tonnage. Quite a few farmers purchased this material," Espinoza said.

He said several farmers called him saying they thought it was a really good deal. He advised them to look at the amount of nitrogen in the product and calculate it on a per pound basis.

"While $145 a ton appeared to be an attractive price, the product contained only 16 percent nitrogen. So when you do the calculations, a pound of nitrogen was costing them 45 cents a pound. If you compared that to 25 cents per pound of nitrogen from urea, you realize that it was not a good deal after all."

He urged farmers to take soil samples so they know the nutritional status of their soil. He said some farmers tend to apply nutrients, such as potash and phosphorus every year, whether they’re needed or not. A soil test will tell them if there’s a need to continually apply those nutrients.

He said farmers tend to cut back on fertilizers in bad economic years to save money. If they must cut back on fertilizer, nitrogen should be the last one to cut.

Farmers benefited from excellent weather and good prices in 2003, and they should build on that success by restoring the fertility to their soils lost in years where farmers cut back on fertilizers and lime, Espinoza recommended.

Lamar James is an Extension communications specialist with the University of Arkansas.

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