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Perfect Storm for Fertilizer Prices

Susanne Retka Schill, Ethanol Producer
It isn’t only grain prices that are skyrocketing these days. Prices for all three major plant nutrients-nitrogen, phosphate and potash-have climbed dramatically, as well.

The market for diammonium phosphate in Tampa, Fla., for example, was $1,100 per metric ton in early April, compared with $255 in January 2007, which doesn’t include transportation costs in a farm or retail margin. “When you see price increases of this magnitude, it’s not just one fundamental driver,” says Mike Rahm, vice president for market analysis and strategic planning for Minneapolis-based The Mosaic Co. “It’s typically from a number of different things.”

First on the list of multiple factors is increased demand. While India and China are often cited as the two growing economies increasing demand across the agricultural sector, Rahm says increases in soil nutrient use are also seen in Brazil, Argentina, Malaysia, Indonesia, Vietnam, Thailand and Pakistan.

… The combined impact on farm fertilizer costs is significant. Rahm’s economic analysis shows that if a Midwestern farmer was paying spot prices this spring, he would be paying $155 per acre for nitrogen, phosphate and potash. “That’s roughly a $100-per-acre increase in fertilizer cost from five to six years ago,” he says. “On the other hand, when the price of corn goes from $2 to $6 [per bushel], the farmer economics still look very good to us.”
(June 2008 issue)

‘Nitrogen cascade’ called threat to ecosystems

MSNBC staff and news service
Studies cite compounds in fertilizers, fossil fuels with cascading effects

While carbon dioxide has been getting lots of publicity in climate change, reactive forms of nitrogen are also building up in the environment, scientists warn in two new studies.

“The public does not yet know much about nitrogen, but in many ways it is as big an issue as carbon, and due to the interactions of nitrogen and carbon, makes the challenge of providing food and energy to the world’s peoples without harming the global environment a tremendous challenge,” University of Virginia environmental sciences professor James Galloway said in a statement.

“We are accumulating reactive nitrogen in the environment at alarming rates, and this may prove to be as serious as putting carbon dioxide in the atmosphere,” said Galloway, author of a paper and co-author of a second on the topic in Friday’s issue of the journal Science.

… The researchers propose ways to reduce nitrogen use, ranging from encouraging its uptake by plants to recovering and reusing nitrogen from manure and sewage and decreasing nitrogen emissions from fossil fuel combustion.
(15 May 2008)

High Cost of Commercial Fertilizer Makes Livestock Manure Fertilizer More Attractive

Farmscape (Canada)
The dramatic increase in the cost of commercial fertilizer this spring is prompting growing numbers of grain and oilseed growers to look much more favourably at the use of livestock manure fertilizer as a source of nutrients for their crops.
Keystone Agricultural Producers’ (KAP) annual spring fuel and fertilizer survey, released earlier this month, shows prices have increased for virtually every class of fertilizer as well as for fuel. The survey shows the price of phosphorus fertilizer has almost doubled, the price of nitrogen is up by 25 to 40 per cent and the cost of potash is up substantially based on offshore demand.

… “We’re going through a period now with rising input costs and certainly that has included the price of commercial fertilizer,” says Dr. Schoenau. “I think that given those price increases of commercial fertilizer it makes looking at manure as a nutrient source that much more important. And certainly I think through good manure management practices one can really realize a lot of benefit these days from the nutrients contained in that source.”

Heard agrees, “I haven’t seen security guards standing around manure tanks yet to make sure nothing disappears, but yes I’ve spoken to several growers that are interested getting their manure put out now.”
(17 May 2008)
Reading the full article makes you realize how permeated agricultural thinking is permeated by reductionism — looking at farming in terms of discrete plant nutrients (NPK) rather than the health of the soil. -BA