The Weekly Reader

Farmers Fret Over Fertilizer Costs

By EMILY FREDRIX
The Associated Press
Wednesday, October 19, 2005; 4:47 AM

OMAHA, Neb. -- Dave Nielsen just spent nearly $14,000 to fertilize his crops, an amount he never could have imagined when he started farming 20 years ago. But the $410 a ton Nielsen paid is symptomatic of the crunch farmers are feeling this year as the cost of fertilizer soars. While rising natural gas prices are causing concerns about heating costs this winter, farmers are wondering how they'll pay for fertilizer, which uses the energy source to produce its main ingredients, such as ammonia or nitrates.

Follow up:

Dave Nielsen of Raymond, Neb., walks in a field of harvested and not yet harvested corn, Wednesday, Oct. 12, 2005. Nielsen just spent nearly $14,000 to fertilize his crops, an amount he never could have imagined when he started farming 20 years ago. The $410 per ton Nielsen paid for fertilizer is symptomatic of the crunch farmers are feeling this year. As the cost of natural gas climbs, so does fertilizer, which uses the energy-source to produce its main ingredient, nitrogen. "There's just a lot of uncertainty in agriculture right now because of the energy costs, and fertilizer is probably the best example of what the uncertainty means in their financial picture next year," said Rob Robertson, vice president of governmental relations at the Nebraska Farm Bureau.

Although most farmers are still harvesting, many have their minds on next year. Their options include using less fertilizer and planting more soybeans or wheat, which can thrive with less fertilizer than corn.

At his farm in northern Lancaster County, near Lincoln, Nielsen decided to plant 25 percent more wheat in the hopes of curbing his consumption of anhydrous ammonia.

In the early 1990s, prices hovered around $200 a ton for that type of fertilizer, according to the USDA. Last year, it was about $335 a ton.

Nielsen said he has cut his fertilizer use on fall applications by 15 percent. Although the yields of corn, wheat and soybeans on his 1,750 acres have been fine, Nielsen said he worries about the long-term quality of his soil without regular applications of fertilizer.

"If you go too much, then you start robbing your soil. Eventually, someday it's going to catch up with you," Nielsen said.

With farmers such as Nielsen choosing not to plant fertilizer-hungry corn, it's possible the country will see a drop in corn production next year, which would give way to higher prices at grocery stores months from now, said Bob Young, chief economist of the American Farm
Bureau.

Fertilizer aside, consumers should expect to pay more for their food because of the overall rise in energy costs and fuel, which affects many aspects of farming, including planting, harvesting and crop drying, Young said.

Many farm groups have been calling for the government to find other sources of energy and get more natural gas, such as through liquefied natural gas, a compressed form that makes the energy source easy to transport. An energy bill that was signed into law recently will ease the way for more imports of liquefied natural gas and give federal regulators final say over import terminals.

Some in the farm industry are even concerned about the availability of fertilizer as the cost of natural gas increases, said John Kugler, marketing president of fertilizer manufacturer Kugler Co. in McCook, Neb. He said some fertilizer companies are selling their natural gas supplies instead of producing fertilizer.

Still, Kugler believes the price of fertilizer may have peaked.

"I can't see it going any higher," he said. "What will happen is, people aren't going to use it."