Tuesday, June 3, 2008

I BET YOU DIDN'T KNOW THAT FERTILIZER PRICES ARE UP

(AP) -- In part because of a global surge in demand, the price of fertilizer has skyrocketed 228% since 2000, forcing U.S. farmers to switch crops, cut back on fertilizer or search for manure as a substitute. Wholesalers and retailers are scrambling to find and buy fertilizer further in advance and juggle what supplies they have to meet customers' needs. Between 2001 and 2006, global demand jumped 14%, an amount equivalent to the entire U.S. market, according to The Fertilizer Institute, a Washington D.C.-based trade group. The price increase means the cost of fertilizing an acre of average-yield U.S. corn rose from about $30 to $160. Barry Ward, extension economist for Ohio State University, said the rising fertilizer prices alone will not likely bump up food prices now at the supermarket but could in the longer term. The demand for fertilizer has been driven by an increasing world population and a growing middle class in developing nations that wants more grain-fed meat and more diverse diets. But the United States has lost more than 40% of its capacity to produce nitrogen fertilizer since 1999 because of the high cost of natural gas. Those producers have moved overseas. Some farmers have considered using manure as a substitute. The challenge is there is not enough livestock in many areas.