3/9/2001 USDA Warns of Spot Fertilizer Shortages, Disruptions by Julianne Johnston

USDA’s Agriculture Marketing Service (AMS) has been watching energy prices closely, as rising fertilizer and transportation costs have a growing impact on the ag sector.

In their latest weekly Grain Transportation Report, the agency says higher prices for fertilizer for the coming spring planting season in the Midwest are truly a concern. The agency has been especially watching the situation develop in the eastern Corn Belt, where they say some of the older, less efficient anhydrous ammonia plants cased production in January. AMS says they are also watching increasing truck fuel prices and surcharges, which makes it more costly to obtain fertilizer that will be available. “Although railroads transport substantial amounts of anhydrous ammonia to farmer cooperative storage areas, much of the fertilizer is delivered to farms by truck,” states the report. “Some Farm Belt cooperatives’ reported fuel costs of 50 percent more than last year and 50 to 60 cents per ton in fuel surcharges for anhydrous ammonia trucked in.”

AMS says the doubled price of anhydrous ammonia may result in less corn being planted. “Less corn production from Eastern Corn Belt farmers could spell trouble for southeast poultry and livestock producers who are major receivers of corn from northeast sources,” says the agency. “Besides the threat of inadequate feed supplies for southeast livestock and poultry, freight costs would be higher to obtain corn from alternate States, such as Iowa.”

“Over the last few weeks, however, production of anhydrous ammonia has resumed and prices are coming down,” says AMS. “Currently, over 95 percent of capacity is reportedly back up and running, trying to make up for down time as spring planting approaches.” But despite this positive news, farmers are concerned over having enough anhydrous ammonia. “Spot shortages are still a worry, as is potential logistical problems associated with getting anhydrous ammonia to farmers when they need it,” says the report. “For example, rain could cause spring planting delays. A rush to prepare fields and plant could also exacerbate shortages and strain available transportation.”

http://www.agweb.com/news_printer.asp?file=AgNewsArticle_200139143_5212&newscat=GN&at=

-- Martin Thompson (mthom1927@aol.com), March 10, 2001