The following information is bonus material from Top Producer. It corresponds with the Moneywise department on pages 8-10 in the October 2008 issue.
Nitrogen and phosphorus fertilizer prices have increased dramatically in the past two years, and the blame is often placed on natural gas prices. Natural gas accounts for 80-90% of the cost of producing anhydrous ammonia, the base material for producing all other nitrogen fertilizers, says Gary Hergert, soils specialist at University of Nebraska.
World demand and ethanol production also contribute to increasing fertilizer prices, Hergert adds. Demand, especially in South America, China and India, has risen 14% in the past few years, he says.