Home / News / Business news / Anhydrous prices surging again

Anhydrous prices surging again

Jeff Caldwell 10/19/2011 @ 9:00am Agricultural content creator and marketer.

Don't look now, but fertilizer prices are surging again.

A recent report from the USDA Agricultural Marketing Service shows prices for anhydrous ammonia in the state of Illinois have jumped $52/ton since early July, with prices now beyond $850/ton in that state. But, the price spike has happened despite a relatively stable marketplace for the main input of the fertilizer, natural gas.

"This has caused the anhydrous ammonia-to-natural gas price ratio to increase dramatically," says University of Illinois Extension ag economist Gary Schnitkey. "These higher ratios indicate that anhydrous ammonia prices have increased relative to natural gas prices. The increase in the ammonia-to-gas ratio occurred roughly at the same time as when commodity prices increased."

Specifically, corn prices are the clear driver of the widening of the ratio between anhydrous and natural gas. Schnitkey says though the ratio has been "spiky" in the last 4 years, higher corn prices send a clear signal to players in the fertilizer marketplace, both on the production and consumption sides.

"These high corn prices could signal shifts in crop production that could change the demand for nitrogen fertilizers," Schnitkey says. "It could also signal profit taking on the part of manufacturing of fertilizers."

CancelPost Comment

Bonnie Miley AGGRAND Natural Fertilizers 05/26/2015 @ 3:02pm If the demand changes for Nitrogen fertilizers, AGGRAND is a great resource. 4-3-3 available in totes for the serious farmer! A complete line of liquid fertilizers for lawn, garden and crop care. Organic series (OMRI) and Natural Series. For mor information please check out www.facebook.com/aggrandmiley

Report Abuse Reply
MORE FROM JEFF CALDWELL more +

USDA Trims Soybean Crop, Stocks; Wheat Crop… By: 06/10/2015 @ 11:11am A smaller soybean crop, a slightly corn crop and a larger wheat crop. That's what USDA…

The [A] List: 3 Big Things This Morning… By: 06/02/2015 @ 6:32am Grains trading higher; crop conditions highest we'll see this year?Grain prices were mixed…

Corn Planting Hits 95% Completion -- USDA By: 06/01/2015 @ 4:04pm For all intents and purposes, corn planting is wrapped up for this year. As of Sunday, only 5% of…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Can Their Problem Be Solved? Meet Jolene Brown
Agriculture.com

FREE MEMBERSHIP!

CLOSE [X]