Tulsa World: High fertilizer prices a growing worry

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High fertilizer prices a growing worry

Ron Pike, president of Lawnmaster, stands beside fertilizer bags at his lawn service company Monday. He says higher fertilizer prices have forced him to raise his fees. Cory Young/ Tulsa World

By ROD WALTON World Staff Writer
Published: 6/3/2008 2:08 AM
Last Modified: 6/3/2008 3:10 AM

Fertilizer and fuel costs forced LawnMaster owner Ron Pike to start charging customers about 8 percent more this year. The increase was the Tulsa lawn service's biggest ever but was minimal compared to what it could have been considering the circumstances.

"We're trying to keep up with inflation," Pike said.

Good luck with that. Everyone knows about higher fuel prices, but fertilizer expenses are growing even faster — percentage-wise — for professional landscapers, farmers and backyard gardeners throughout Oklahoma and across the country.

Urea, a key form of solid nitrogen fertilizer, doubled in price from 2000 to 2007 and then went another 40 percent higher over the past year, according to reports. Potash, another key ingredient in some fertilizers, now costs nearly $600 per ton, while phosphate is nearing $1,000 a ton.

Coupled with higher fuel and seed costs, farmers face a lethal mix that contributes to surging food prices.

"You're going to see a lot of farmers quit after this year," said Don Carmichael, owner of Carmichael's Produce in Bixby.

"The oil industry is the one getting rich," he added.

OK, energy companies are easy targets for all that's ailing consumers these days. Nonetheless, fertilizer producers say that steeper fuel costs, particular involving natural gas, is the X-factor in the high cost of making agricultural nutrients.

Terra Nitrogen, the liquid fertilizer producer based near the Tulsa Port of Catoosa, burns about

120,000 million British thermal units of natural gas each and every day, said plant manager Dallas Robinson. The giant facility produces 2.2 million tons of urea ammonium nitrate and 200,000 tons of shippable anhydrous ammonia annually, and natural gas accounts for about 90 percent of the production costs.

Terra Nitrogen usually pays about $7 to $8 per mmbtu, but next month's bill will be closer to $12, Robinson pointed out. Electricity costs are also charging upward, and the plant manager doesn't know where it will end.

"If I knew that, I'd be a very wealthy man," Robinson said.

Fuel cannot be blamed for everything that goes up, he added; fertilizer demand is also reaching all-time highs and may bear some responsibility for the costly chaos. Some chemical components are fetching record orders worldwide for everything from farming to mining.

"It's real global," Robinson said. "This is the first year in 30 years that (fertilizer) demand exceeds supply."

The U.S. supply of ammonia for nitrogen fertilizers declined nearly 20 percent from 1992 to 2006, while U.S. imports increased 115 percent, according to the U.S. Department of Agriculture.

Corn is certainly another root cause for fertilizer inflation. The crop, which often requires four times as much nitrogen-rich fertilizer as others, is growing about 10 percent or more in planted acreage because of higher commodity prices and ethanol research and production.

Nearly all of the corn grown professionally in Oklahoma is used for grain in livestock feed or for ethanol. Last year, U.S. corn production tallied an all-time record 13 billion bushels, with nearly a third of that ear-marked for ethanol, according to reports.

Oklahoma's corn harvest totaled more than 33 million bushels, not a volume record, but the state's crop value topped $100 million for the first time ever.

Carmichael grows sweet corn for human consumption, but he also is trying to keep up with increased demand.

"We're trying to plant more corn," he said. Fertilizer and fuel costs "makes it tough."

In fact, Carmichael is paying $700 per ton for urea — compared with $500 per ton only two months ago — and expects it to rise a little more.

"You're left wondering if you can get enough out of your crop," he said.

Last year, Carmichael was charging up to $14.99 for a bushel of his sweet corn. This year he's buying some Florida corn wholesale at $18 per bushel while he waits for his crop to ripen.

Guess who's ultimately going to pay more for corn this summer?

"I've got to sell it or leave it in the field, and that doesn't make any money," he said. "It's all coming back to the customer."

Passing on costs doesn't always match the added expense of doing business, both Carmichael and Lawnmaster's Pike pointed out. The law service company has grown its client base through most of its 34 years in business, but the list is expanding at a slower rate these days as consumers deal with their own gasoline and food costs.

"This is the worst year for cutting back," Pike said. "People are watching their Ps and Qs."

Rod Walton 581-8457
rod.walton@tulsaworld.com
By ROD WALTON World Staff Writer

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If you see a comment that violates our terms and conditions, please help us by clicking the "Report this Comment" link next to a comment. That will alert the web staff to review the comment. Thank you. -- Web Editor Jason Collington

	Report Comment Lana, (6/3/2008 7:55:54 AM) Oil company greed hits everyone every where.
	Report Comment Getting Better, (6/3/2008 12:34:19 PM) Guess I'll stop complaining about Green Up increasing their prices 5% every year. I think I will go to Home Depot and buy my own fertilizer.

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