What's Up With Fertilizer?

What's Up With Fertilizer?

What’s Up With Fertilizer? I’m Greg Martin with today’s Line On Agriculture.

To buy or not to buy?  That is the question for many farmers waiting for retail fertilizer prizes to drop like they have on the wholesale level.  Depending where you are, prices for anhydrous ammonia fertilizer range from $600 a ton to $1000 a ton.

FRANCL: Farmers are in a waiting game situation.  They’re trying to straddle a very fine line to get lower prices and still get adequate supplies.  Unfortunately if you wait too long in the spring and things break, then these supplies become very scarce.  So it’s a difficult line.

American Farm Bureau Economist Terry Francl says the big question is the profit margin.  Will farmers see input costs drop as much as commodity prices have?

FRANCL: Even though our fertilizer prices are going down they’re still higher than they were say two or three years ago and the same goes for the fuel, again down from last year, but higher than it has been in the recent past.  We’re seeing that the profits per acre are markedly lower that they were a year ago.

Francl says the lower input costs are good news for consumers.

FRANCL: We saw food price inflation last year at about 5.5 percent.  The USDA recently projected that that’s probably going to be in the area of three to four percent, some of that is dependent on what the economy is doing.  It’s probably going to be at the lower end of that.

Francl says the prices for fertilizer vary widely throughout the country. 

FRANCL: Fertilizer prices are quite varied on the retail level and it depends what part of the country you’re from, it depends who you’re doing business with.  An example would be anhydrous ammonia. Retail prices now might be as high as $1000 a ton in some areas and it might be in the $600 range a ton in other areas.

Francl says lower input costs for farmers will help hold down food prices for consumers.

FRANCL: Unfortunately when we see prices go up, they go up rather rapidly.  When they go down, economists say it’s kind of a sticky downward path and so it takes a while. Eventually it will happen and right now if we look at it we are seeing virtually no increase in food prices and it’s probably going to be at a low level, three, at most four percent for the year.

That’s today’s Line On Agriculture. I’m Greg Martin on the Northwest Ag Information Network.

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