Farmers and ranchers will have to pay more for fertilizer products as gas and oil prices continue to increase, according to The Fertilizer Institute. But, increased management could alleviate some of the rising costs.

Fertilizer is valued as a commodity and has for several years been at very low levels due to heavy supplies and increasing production facilities around the world. However, the trend is expected to come to an end in 2000. Environmental regulations, old facilities and high natural gas prices in the U.S. are on the rise causing prices to increase. Natural gas prices have practically doubled this year causing the majority of the increase.

Natural gas is the major cost component in making all basic fertilizer products. The Fertilizer Institute noted that according to 1999 production cost survey, an estimated 635 trillion Btu's of natural gas was used in 1999 for ammonia manufacturing. The U.S. Department of Commerce estimates that 19 million short tons of ammonia were produced in 1999, with approximately 90 percent going to fertilizer uses. In June, natural gas prices increased from about $2 per MMBtu to around $4.30 on average per MMBtu. Additionally, the cost for production of ammonia rose from $100 per tone to $180 gas accounts for the majority of the production cost. (Source: Doane's Agriculture Report)

As fertilizer prices climb, beef producers should take a serious look at management practices that reduce the need for commercial fertilizers. When cattle graze, for example, large quantities of the nutrients in the soil are removed through the forage. However, cattle convert only a small percentage of those nutrients into beef and return the majority back to the ground in their feces. The problem of nutrient loss in grazed pastures is predominately one of redistribution. Intensive management of grazing can improve dispersal of nutrients back on to the ground and reduce fertilizer needs. Retaining harvested forages on the pastures from which it is take can also aid in this redistribution.

Producers should also take a high number of soil tests in their pastures to accurately monitor soil fertility and apply only what is needed. Keeping yearly records of soil tests can also be beneficial to application decisions.

The Fertilizer Institute