Fertilizer prices key on energy prices. With that in mind they should
come down. Lawn fertilizer is basically nitrogen fertilizer.
Manufacturing 1 ton of anhydrous ammonia fertilizer requires 33,500
cubic feet of natural gas. When natural gas prices are $2.50 per
thousand cubic feet, the natural gas used to manufacture 1 ton of
anhydrous ammonia fertilizer costs $83.75. If the price rises to $7.00
per thousand cubic feet of natural gas, the cost of natural gas used in
manufacturing that ton of anhydrous ammonia rises to $234.50, an
increase to the manufacturer of $150.75. Most of the other popular
forms of nitrogen fertilizer are made with anhydrous ammonia. Urea is
formulated by a reaction between anhydrous ammonia and carbon dioxide at
high temperature and pressure. Ammonium nitrate is formulated by
combining anhydrous ammonia and nitric acid in a very corrosive
manufacturing climate. Solution liquid fertilizers (28 to 32 percent
nitrogen) are composed of one-half urea and one-half ammonium nitrate.
It's pretty hard to apply a nitrogen fertilizer formulation that doesn't
have natural gas in its manufacturing process.

Prices for diammonium phosphate (DAP), Phosphate rock, Potassium
chloride, triple superphosphate (TSP), and Urea were 235 percent higher
in the quarter ending June 30,2008, over the prior period a year
earlier. The biggest gainer was Phosphate rock which has risen 514
percent between April-June 2008 and April-June 2007.

Of course the people that bag and distribute the fertilizer leverage
their price on the cost of the basic materials. Fertilizer sales have
slowed dramatically in recent weeks, indicating farmers are either
waiting until the last minute to buy for the coming season or even
forgoing some fertilizers. Fertilizer purchases are running about 60
percent of normal.

The $500- to $700-per-ton acceleration in fertilizer prices during the
last 18 months now pales next to the viciousness of the price collapse
last fall: Between October and November 2008 alone, wholesale prices of
ammonia plunged from $830 per ton to $110 per ton, less than the cost of
North American production, fertilizer manufacturers report.

Jay Chan wrote:

On Jan 7, 10:08 am, Phisherman wrote:
I checked out the "turf builder" fertilizers at the BORG. A Lesco bag
of fertilizer that covers 12,000 sq feet is $57. I would need 3 bags
to cover the lawn, so with tax that runs $190. Last year it was less
than $60. Most of the bags were covered with bird crap on them and
had holes large enough to spill out the contents. I guess nobody else
is buying either.

Half a year ago when commodity Price was very high, I read an article
about the price of fertilizer that are from mineral would go up
because there were only a few places that exported one of the
fertilizer component (the word "Russian company" somehow comes to my
mind). This creates a semi-monoply situation. And they were talking
about double or triple the price of that fertilizer component.

I think the article was about the price of potassium if I remember
this correctly. Regardless which mineral we are talking about here, I
would assume that their price should have come down along with the
other commodities, right? If this is not the case, I don't know --
may be the store is selling their old stocks based on the old purchase
price.

Anyway, I will not be surprise to see fertilizer price goes up.
Considering the fact that people in the world want to eat better. And
the green revolution requires the use of large amount of fertilizer.
Now I hear about bringing green revolution to African countries. This
is a good thing for hungry people in that continent. But there is
obviously a good chance that the use of mineral based fertilizer will
also go up despite how many times people say they want to use
organic. Therefore, fertilizer price probably will go up. In
addition to this, the purchase power of US dollars will come down if
the huge spending program is approved in US. These will all affect
the price of fertilizer.

Seem like this is a good time to go organic, and this is exactly what
I am trying to do with the use of composts, chicken manure...etc.

Jay Chan
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