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 Jan. 14, 2022 By Margy Eckelkamp, The Scoop magazine This week, Texas A&M Agricultural and Food Policy Center (AFPC) released two reports on the on-farm economics of the current fertilizer market. One report stated on a per-acre basis, farmers are seeing nitrogen costs increase $52.07 across the farms used in the AFPC modeling. The second report, prepared for 21 state corn grower groups, cited the cost of natural gas for about 15% of the price increase over the past year. That finding was in contrast to what some in the industry have felt has been an overstatement attributing high fertilizer product pricing to the sole increase in natural gas. In a statement, Nutrien provided the following reaction: "There are a number of factors driving global nitrogen pricing. While the market for nitrogen is global, and prices reflect that, the study seems to reference only natural gas prices in North America. The fact is that Europe has seen natural gas prices top $30 MBTU during 2021, causing several producers in Europe to actually close production for a number of weeks in the Autumn of 2021, thereby further diminishing supplies in the global market. In addition, weather related events such as Hurricane Ida earlier in the year closed production at several facilities in the southern US for several weeks, while China and Russia have both imposed curbs on exports that further diminish global supply. The study does not seem to address the surge in global demand for nitrogen throughout 2021 that has combined with these factors to have a negative impact on supply; the result being markedly higher prices." To view the complete report, click here. Tweet |
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