- Fertilizer price is volatile
- Foreign sourcing an issue
- Management strategies
Farmers can expect more volatility in fertilizer prices than they may have been used to until recent swings, thanks in part to the United States changing from a fertilizer manufacturer and exporter to a net importer.
“Production moved out of the United States,” said Oklahoma State University Extension economist Phil Kenkel during the Rural Economic Outlook Conference on the Oklahoma State University campus in Stillwater.
The change from exporter to importer puts price at risk of supply disruption, transportation costs and foreign exchange rates.
Natural gas price also may play a role since it is the second most volatile commodity in the world and accounts for 90 percent of nitrogen fertilizer production. “Nitrogen fertilizer will be tied to energy markets,” Kenkel said.
But the price of natural gas in the United States is not a critical factor since most of nitrogen fertilizer is manufactured elsewhere. Higher world commodity prices may mean increases in fertilizer demand and price.