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Low supplies prompt fertilizer concerns
MISSISSIPPI STATE -- Rising fertilizer costs brought on by natural gas price increases are no longer a future worry but a present problem for Mississippi farmers.
Natural gas prices rose from $2.30 per million British thermal units to almost $10 between January and December 2000. Much of that increase came in the last couple months of the year. But why do high gas bills affect farmers more than workers in other industries?
Larry Oldham, soil specialist with Mississippi State University's Extension Service, said natural gas is the primary ingredient in anhydrous ammonia, a very common fertilizer which is used to make many other fertilizers frequently applied in Mississippi.
"The most common fertilizers used in the state are ammonium nitrate, urea, urea/ammonium nitrate or UAN solutions, and anhydrous ammonia," Oldham said. "The vast majority of cotton and corn in Mississippi is produced using UAN solutions, and ammonia nitrate is used extensively on pastures and forages."
When natural gas prices got so high in December, many chemical companies could not profitably produce large amounts of fertilizers. Demand for fertilizer is low in the winter, but demand for natural gas was higher than in recent years.
"Natural gas prices have eased since January and are now about $5 to $6 per million Btu. Producers are starting to manufacture more fertilizer because it is economical to produce and sell it at the current high fertilizer prices," Oldham said.
Even though natural gas prices have dropped, nitrogen fertilizer prices are still quite volatile. Despite changing prices, Oldham said farmers must ensure they have an adequate supply of nitrogen fertilizer for their crops.
Oldham said the Mississippi Agricultural and Forestry Experiment Station and the Extension Service field-tested recommendations for corn's nitrogen needs in various soils over the past three years. Research on cotton's nitrogen requirements has been ongoing for many years.
"We feel it's much more important to worry about having a sufficient supply of fertilizer than worry about the rate of application to the crop, even though retail fertilizer prices are more than double last year's rate," Oldham said. "Losses from crops grown without enough nitrogen fertilizer will cost farmers more than what they will spend on increased nitrogen costs."
He said farmers concerned about increased fertilizer costs should consider switching acreage to soybeans, which don't require nitrogen fertilizer, or plant crops that require less nitrogen. Another option is to change the fertilizer application schedule to later in the growing season when supplies are more stable and producers hope prices will have dropped.
Jerry Singleton, specialized cotton Extension agent in Leflore County, said farmers in his area have definitely felt the cost increase.
"Most are probably going to cut their corn acres somewhat due to the high cost of nitrogen," Singleton said.
What corn acreage is lost will probably go to cotton, Singleton said, which uses nitrogen fertilizer, but at a lesser rate. Farmers in the Greenwood area are also planting more milo, another crop that requires less nitrogen than does corn.
"Cotton requires about half the nitrogen that corn requires," Singleton said. "In general, the irrigated-corn farmer puts out 200 to 250 pounds of nitrogen, while the cotton farmer puts out 100 to 140 pounds."
Singleton said some producers traditionally have used more nitrogen fertilizer than recommended, and these will likely cut application rates by 10 to 15 percent to reduce costs. However, reducing nitrogen fertilizer application below recommended levels will lead to reduced yields and lower profits.
More information on nitrogen fertilizer issues is available from MSU's Extension Service online at MSUcares.com.