Fertilizer sticker shock
Fertilizer prices may continue to rise due to high demand.
Just like motorists filling up their cars with gas, orchardists are experiencing sticker shock as they buy their fertilizers and agricultural chemicals.
Greg Rosenau, purchasing manager with Northwest Wholesale, Inc., in Wenatchee, Washington, said the price of a 46-0-0 urea fertilizer, for example, has risen more than 25 percent in less than a year, and he expects prices to continue to rise.
It's all related to supply and demand on a global basis, he said. Over the past few years, there's been a huge demand for fertilizers in China. About three years ago, Rosenau heard of an incident where barges of fertilizer en route from Scandinavia to the U.S. West Coast were diverted to China when Chinese buyers offered a higher price. "That was one of the first indications of the impact of the Chinese on the fertilizer supply in the United States," he said.
More recently, a major increase in corn acreage to feed ethanol production has increased demand for fertilizers in the United States, Rosenau said. Huge plantings of Round-up–ready corn in the Midwest have also resulted in higher prices for Round-up (glyphosate).
In addition, some nitrogen is imported from Canada, where the currency has strengthened against the U.S. dollar, making the cost higher.
Everyone's aware of the rising costs of gas and of basic foods, such as bread and milk, Rosenau said, but he thought growers might be in for a surprise this spring when they started to buy supplies for the season after not buying since last fall.
"It's frustrating for the growers who are trying to get a handle on what their input costs are going to be."
He said by making an early commitment to purchase urea, Northwest Wholesale was able to secure a good price, but there was a limit on how much it could buy because of limited storage space.
The next time he buys it, the price is likely to be higher, Rosenau said. The days when a fertilizer price was good for the season are over. He used to be able to refer to the same price sheet all season long, and it ended up brown and tattered and looking like a piece of medieval parchment, he said. Now, he'll have a revised price sheet at least every month.
"It's very volatile," he said. "We're just doing the best we can, and taking every opportunity we have to make purchases that are advantageous for our growers. We're all in this together, and we're working together to make sure that the growers are successful."