Middle East unrest likely to drive nitrogen fertilizer costs higher

By ROBERT BURNS
21 March 2011 OVERTON — Escalating unrest in the Middle East is not only going to continue to drive gasoline and diesel fuel prices up to 2008 levels, but there’s a good chance it will do the same to the costs of fertilizing pastures, according to a Texas AgriLife Research expert. Even if it doesn’t further contribute to rising fertilizer costs, they’re high enough already that livestock producers “absolutely must learn to better manage nitrogen applications to stay in business,” said Dr. Monte Rouquette, AgriLife Research forage scientist. Rouquette is one of the instructors at the upcoming Pasture and Livestock Management Workshop, a 2 ½ day course set March 29 – April 1 at the Texas AgriLife Research and Extension Center in Overton. The course has always been about helping both novice and experienced producers how to better manage inputs and utilize forage resources. Now, with fertilizer costs rising again, it’s more critical than ever for those in the cow/calf business to “fine-tune livestock production inputs and management skills from the grass roots up,” he said. “The cost of ammonium nitrate today is $460 per ton, or about 68 cents per pound,” Rouquette said. “Last year about this time it was 53 cents per pound.” For the last six to 10 years, fertilizer costs have been rising, he said. The prices relaxed somewhat in the last three years from 2008 when they reached 70 to 75 cents per pound. But even before the Middle East meltdown, prices had been steadily climbing. Though nitrogen fertilizer is made from natural gas, all fuel prices are linked, he explained, so the increase in one leads to a rise in others. There’s also the associated cost of transporting and applying fertilizer as the cost of diesel rises. This all could mean that cow/calf and other livestock producers will have to drastically rethink their production strategies as all the modern, improved warm-season grasses are big users of nitrogen. “We are revisiting the dilemma of the price of fertilizer becoming a major constraint on pasture use, and that would indicate that if managers don’t have efficient cattle that have sales value — as well as a plan for utilization of the forage that is produced — then fertilizers may windup on the endangered list,” Rouquette said. Dealing with these issues and others will be a major thrust of the grazing school, he said. …

Middle East unrest will likely drive nitrogen fertilizer costs higher via The Oil Drum