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Sticker shock: fertilizer costs are up, but the price tag’s been higher

The price for fertilizer is high, but an ag economist says it’s been worse.

David Widmar, co-founder of Ag Economic Insights, tells Brownfield looking at the costs, the sticker shock depends on context. “That 37 percent increase in anhydrous ammonia or urea prices for example from the fall lows seem much more dramatic than say anhydrous being up only 17 percent from a year ago.”

He says anhydrous ammonia is averaging $650 a ton – up an average of 44 percent from six months ago but that’s not the highest. “The decade before us, we spent entire years between $800-$900 for that product,” he says. “We’re seeing highs but in most cases we’re well below those highs we saw seven or eight years ago.”

Widmar says diammonium phosphate (DAP) is nearing its highest cost ever at $700 per ton. “The momentum here is coming out of the DAP market and phosphorus prices are very strong. I think that’s actually the majority of the story here and it’s less about nitrogen. Although, nitrogen has its components as well.”

He says the amount of fertilizer used and corn and energy prices will determine where the market heads.