05/09/07 Why High Fertilizer Prices

A short time ago I spoke with a hay farmer Ross McCreary from Quincy who was frustrated about the cost of fertilizer and I didn't have any encouraging words. Summer looms wrought with high fuel prices meaning the cost of nitrogen has risen in some cases 20 to 40 percent. Nitrogen, by virtue of its dependency on petroleum products is directly tied to the price of fossil fuel. That, coupled with high price of corn , one of our nations' most fertilizer dependant crops means an equation sure to keep fertilizer prices high. As farmers work to whittle away at their overhead to attempt to make crops and livestock pencil, the fact that the largest publicly traded fertilizer manufacturers' had record-breaking first quarters is enough to make even the most composed farmer gnaw his eraser. The big four which includes, Mosaic, Potash, CF Industries and Terra were up 24 percent and posted net incomes of $332 million compared to 12 million during the same period last year. Farmers in part caused their success by virtue of planting acres and acres of corn coupled with high application rates.