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January 22, 2008

Plan ahead to avoid fertilizer shortages

K-State specialist says demand, high prices making it difficult to get fertilizer needs filled

by Steve Watson

Supplies of nitrogen fertilizers, as well as phosphorus and potassium fertilizers, are tight throughout the United States, making this the time to plan ahead, a Kansas State University agronomist said.

In fact, it is currently difficult to buy fertilizer nitrogen for winter wheat topdressing and/or this spring´s row crops unless the supply has already been lined up---regardless of what the posted prices are, said Dale Leikam, K-State Research and Extension nutrient management specialist.

"The tight supply situation applies to all the main nitrogen fertilizer sources- UAN solution, urea, and ammonia---as well as other phosphorus and potassium fertilizers. Fertilizer prices are continuing to increase and supplies will likely remain very tight for the foreseeable future," Leikam said. "Therefore, producers should keep in close contact with their supplier in order to line up their anticipated fertilizer needs. Waiting until it is time to apply crop nutrients to make arrangements for fertilizer needs could leave producers on the outside looking in."

The sharp increase in price and accompanying fertilizer N shortage is not a sudden development, the agronomist explained. Unprecedented market forces have markedly changed the fertilizer industry over the past decade which has set the stage for the current supply/demand imbalance and resulting high prices, he said.

"Over the past decade, much of our fertilizer nitrogen manufacturing capacity has shut down in the U.S. as a result of sharp increases and fluctuations in natural gas costs, lower-cost foreign competition, domestic environmental regulations, and so forth. In most cases, the domestic fertilizer manufacturing plants that have ceased operations will likely never come back on line despite the current higher fertilizer nitrogen prices," Leikam said.

As a result, more and more nitrogen fertilizer is now imported from countries in the Middle East, South America, the former Soviet Union, and other low-cost natural gas areas, he said.

"More than 50 percent U.S. fertilizer nitrogen supply is imported annually---and our dependence on foreign imports continues to increase.

“Also, global demand for this supply of fertilizer nitrogen continues to increase, especially in countries such as China and India with rapidly expanding economies," Leikam said.

Producers can do little about this situation except to keep in constant contact with their local fertilizer supplier and commit to needed products as soon they know what their needs are, the K-State agronomist said.

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