MOORE HAVEN — Just about every day, Dennis Wedgworth
fields telephone calls from worried
They can't be happy about his answer.
Dennis Wedgworth, at his fertilizer-blending company's Moore Haven plant, expects the price of potash to top $1,000 a ton. A year ago, the cost of one of fertilizer's key ingredients was in the mid-$200s.\uFEFF affected, too, with higher prices at the groceries.
"People will have to pay more for their food," said Dan
Davidson, an agronomist with DTN, a business-information provider in
Food prices already are forecast to increase by 4.5 percent to 5.5 percent this year as retailers continue to pass on higher commodity and energy prices, according to the U.S. Department of Agriculture's Economic Research Service. That follows a 4 percent increase in 2007, the biggest annual jump in food prices since 1990.
The higher diesel and fertilizer prices have their origin in the same
phenomenon: A sharp rise in global demand, as rapidly industrializing countries
"Whether you are talking about steel or concrete or fertilizer,
the affluence of the population in
All fertilizer ingredients are more expensive, from the big three — potassium (in potash), nitrogen and phosphorus (in phosphate rock) — to the minor elements, including manganese and copper.
In the past year, fertilizer costs have soared 77 percent, said
Estelle Grasset, spokeswoman for The Fertilizer
"The main source behind the demand has been international demand — the need to produce more food to feed more people," Grasset said.
Wedgworth's, the only blender in
Inside the plant, a visitor can see a 10,000-ton pile of
salmon-colored salt crystals. It's potash, or potassium carbonate, a major
fertilizer ingredient that has been transported by rail from
Without it, the nation couldn't produce enough food to feed itself.
That potash heap would have been valued at $2 million a year ago. It's now worth four times as much.
"Potash is our biggest ingredient. We were buying it in the mid-$200s per ton a year ago. It's up to the mid-$800s now," Wedgworth said. "Our producers tell us it will go over $1,000 a ton."
Making supplies even tighter is
Today, it's paying $2,000 a ton to get it from
With no relief from fertilizer costs in sight, farmers are trying to do what they can to survive, such as being more careful with fertilizer applications.
"You cannot survive with a cheap market anymore,"
Technology might be able to help farmers in the future.
Ronald Rice, a
Meanwhile, fertilizer makers and blenders stand to do very well in the
next few years, said Steve Pinney, a senior vice
president for phosphate operations at The Mosaic
"There's unprecedented surge in demand. Crop nutrients of all kinds have doubled in usage around the world since 2006," Pinney said. "Increasing commodity prices have told farmers around the world it is time to grow more."
Mosaic, one of three companies with phosphate-mining operations in
"The need for food in the world isn't diminishing. There is only so much land that is out there," he said. "Increasing the yield of the crops grown on that land requires nutrients for crops to grow."