Fertilizer Prices Stabilizing, U.S. Supplies Are Adequate

Farmers are benefiting from lower and more stable fertilizer prices this spring, reports AgriMarketing. According to the USDA National Agricultural Statistics Service for the North Central region, between April 2009 and April 2010 fertilizer prices for anhydrous ammonia have dropped by $250 per ton, potassium is down $350 per ton and phosphate is down $50 per ton.

The worldwide financial crisis created much lower and more stable fertilizer prices because of weaker worldwide fertilizer demand. As a result, farmers that may have cut back on fertilizer rates in recent years due to previously higher prices, may be feeling a bit more comfortable with their normal program, said Bruce Erickson, director of cropping systems management at Purdue.

The overall supply of anhydrous ammonia available in the U.S. is expected to be large enough to keep prices in check, but the capacity of the delivery infrastructure has been tested in some places this spring.

The wet and late 2009 harvest meant less fertilizer went on the fields last fall, and with the early start this spring the distribution system has been tested, said Alan Miller, Purdue agricultural economist.

In the past several years U.S. producers of ammonia fertilizers were at a cost disadvantage relative to other suppliers around the world and, as a result, more of the nitrogen fertilizer used in the U.S. has been imported.