Fertilizer prices shoot upwards

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Fertilizer prices shoot upwards By Larry Reichenberger Crops and Machinery Editor Successful Farming

Fertilizer prices are increasing dramatically across the Midwest. Dealers in Kansas will raise the price of NH3 by $55.00 per ton on Monday to a price of $330.00. Farmers rushing to book the product at existing prices were generally unable to find adequate supplies. The increase marks the largest ever one-time step in NH3 prices.

The price of other nitrogen fertilizer products is also increasing rapidly. Urea (46-0-0) will shoot to $235.00 per ton, up $14.25. Liquid nitrogen (28-0-0) will increase $25.00 per ton to $175.00 and the price of starter fertilizer (10-34-0) will increase from $210.00 per ton to $235.00.

The rapid increases are the result of a similar increase in the price of natural gas, the primary feedstock in NH3 production. Gas prices have quadrupled over prices one year ago and many fertilizer manufacturers are shutting down production as a result. On Thursday, Agrium, Canada's second-largest producer, announced it was cutting output at five of its North American plants resulting in a 17% decline.

Also, on Monday, US manufacturer Terra Industries announced it was idling production at a plant in Oklahoma along with shut downs announced earlier in Arkansas and Texas. And, Farmland Industries has told its dealers it will not reopen its facility in Lawrence, Kansas with crippling gas prices. Representatives from Farmland told dealers that, at current gas prices, the feedstock alone to manufacturer a ton of NH3 would cost $350. 12/15/2000 01:24 p.m.CDT

http://www.agriculture.com/default.sph/AgNews.class?FNC=sideBarMore__ANewsindex_html___44560

-- Martin Thompson (mthom1927@aol.com), December 19, 2000

Answers

Another consequence of high natural gas prices. Layoffs at fertilizer plants. One more domino, one more puzzle piece to the bigger picture.

However, we're not getting the whole picture as to why natural gas prices have skyrocketed so much.

My understanding is that California's much higher than the nation for natural gas prices and that's due to the pipeline that blew in New Mexico. Is that accurate? What other reasons are there other than they have a deregulated market and the companies selling natural gas can charge whatever they want because there are no other sources to turn to.

-- Guy Daley (guydaley@altavista.com), December 19, 2000.


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