10/24/07 Fuel and fertilizer outlook

Farm and Ranch October 24, 2007 Farmers and truckers shouldn't expect a break on fuel prices any time soon. Gruenspecht: "Global oil market conditions will likely persist through 2008." That's Dr. Howard Gruenspecht from the Energy Information Administration telling the U.S. House Agriculture Committee that prices for some fuels are not going to go down and not even stay where they are. Instead; Gruenspecht: "Retail diesel prices in 2008 are projected to average nearly $3 a gallon, up 20 cents from their 2007 level." Gruenspecht was basing his figures on oil prices averaging above 70-dollars a barrel, but they have since been in the mid-80 dollar range. Don't expect a break on fertilizer prices either. Ford West, President of the Fertilizer Institute, says strong international and domestic demand are driving fertilizer prices higher and he expects that to continue. West: "We have had to shut down 25 plants in the U.S. The cost of nitrogen fertilizer is tied directly to the cost of natural gas. We do import about half of our nitrogen fertilizer but those imports are coming in at world prices and that keeps the price of fertilizer consistent with world prices." USDA data show that average fertilizer prices in August of this year were 113 percent higher than the 1990-92 level. Fuel costs have increased 161 percent since that period and prices for seed, farm machinery and wage rates are up 76 to 111 percent. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.