Costly Crops 

Associated Press

April 8, 2007  

AP photo  Weldon Burkholder, of Albany , Ore. , watches as his spreader’s bin fills up with fertilizer while preparing to fertilize an annual rye grass field last week. The price of fertilizer has gone up significantly in the past several months.

    ALBANY , Ore. (AP) — Mid-valley farmer Weldon Burkholder starts the engine on his auger, and white and black pellets begin streaming into a hopper on a fertilizer spreader. Soon, Burkholder has loaded more than 2,500 pounds of nitrogen that will cover about 6 acres on a field southeast of Albany . 

   He’s also spent about $500. The routine will be repeated several times throughout the day. 

   Burkholder and other area farmers and livestock producers are paying more for fertilizer this year, as are producers all around the country. 

   ‘‘In January, we paid $350 per ton for 46-0-0 nitrogen,’’ Burkholder said. ‘‘This week, it’s about $400 per ton. It doesn’t seem like it was too many years ago that it was about $200 per ton.’’ 

   Burkholder has grown grass seed for about 25 years and expects his per-acre input cost for some types of fertilizer to be about $80. The type of fertilizer and how much is used depends on the crop. Some crops need 250 pounds of fertilizer per acre, while others require 400 pounds. 

   ‘‘Everything we use in agriculture is interrelated,’’ Burkholder said. ‘‘Costs have gone up across the board, from production to delivery. Chemical prices are also going way up.’’ 

   Escalating costs 

   Burkholder farms about 1,300 acres and said a number of factors are contributing to escalating fertilizer costs. 

   ‘‘For the first time in history, domestic nitrogen is cheaper than imported nitrogen,’’ Burkholder said. ‘‘Emerging countries like China and India are now big buyers on the international market.’’ 

   Like many mid-valley farmers, Burkholder’s operation is diversified. His crops include annual ryegrass, perennial ryegrass, fescue, orchard grass and clover. 

   Beth Parsons, purchasing coordinator for Western Farm Services Cascade Division based in Tangent, said she has seen five or six price increases in one month for some forms of fertilizer. 

   ‘‘Fertilizer prices are up, in part due to supply and demand,’’ Parsons said. ‘‘New prices come out to the growers on a monthly or semimonthly basis. They don’t necessarily see the price increases we see.’’ 

   Parsons said the fertilizer export market is strong. Demand is growing in countries like Brazil and Malaysia . With increased demand comes increased production, Parsons said, but plants need downtime for maintenance. 

   ‘‘It’s hard to resume increased production required every quarter or every year without putting some money and downtime into the plants. When they’re down, it means lost business,’’ Parsons said. 

   Many fertilizer plants and mines are old, Parsons said, and are experiencing growing pains as they attempt to make renovations to handle trucks and rail cars more efficiently. 

   Ethanol a factor 

   The boom in ethanol production in the Midwest is also a factor in escalating fertilizer prices, Parsons said. The amount of land dedicated to corn production in key Midwestern states is expected to grow by more than 13 percent to about 88.5 million acres — the most since the 1940s. Planting corn after corn requires more fertilizer than rotating corn with other crops such as soybeans. 

   ‘‘Obviously, this is going to take a huge amount of fertilizer off the market and will put pressure on our local markets,’’ Parsons said. 

   Pat Boren, also of Western Farm Service, said getting an accurate snapshot of fertilizer prices is like trying to hit a moving target. It’s also important to compare apples to apples — comparing the same fertilizer mixtures — when talking about price increases. 

   ‘‘In the 1990s, domestic fertilizer plants were closing because they couldn’t compete with low prices from the world market,’’ Boren said. Boren said the price for 40-0-06 — fertilizer widely used on grass seed crops — has gone up about $100 per ton in the last three months. Depending on the type of fertilizer and the amount needed, cost per acre could be up $15 to $20, he said. 

   The good news, he said, is that commodity prices are up throughout much of the country. 

   Dave Nelson of the Oregon Seed Council said that although producers are looking at relatively strong seed prices, he expects their costs to outstrip their gains. 

   ‘‘They’re going to get a little more for seed, but it’s all going to be eaten up by extra costs,’’ Nelson said. ‘‘The farmers I’ve talked to are going to try to minimize their trips across fields to cut down on fuel costs. Maybe they can get by with one disking instead of three, that kind of stuff.’’ 

   Nelson said he is optimistic about seed prices, although there is some concern about the continued winter weather in the Northeast, which is a major spring market for many grass seed companies.

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