Posted on Wed, Apr. 16, 2008
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Fertilizer cost rising sharply
Result will be higher food prices
By JACOB ADELMAN
THE ASSOCIATED PRESS
MOST-READ STORIES
LOS ANGELES --
Link Leaven's fertilizer bill has been growing faster than the lemons and avocados on his Ventura County farm."It's like there's no end in sight. It's very scary," said Leaven, who pays $600 for a ton of some fertilizer mixes he paid half as much for just six months ago.
Farmers across the country are seeing similar price increases caused by several factors, including the booming demand for fertilizer to produce animal feed for rapidly developing nations such as India and China, where people are adopting diets richer in meat.
In the U.S., high gasoline prices are prompting growers to plant fertilizer-dependent corn for the manufacture of ethanol fuel. High energy prices also have affected the availability of natural gas, a key part of nitrogen-based fertilizers that can now be sold more profitably as fuel.
Midwestern growers of commodities such as corn and grain have been able to absorb the cost hikes as their crops fetched higher prices. But growers in California, the nation's leading agriculture state, have yet to see retail prices increase for fruits and vegetables, their main crops.
In fact, farmers saw the average price of broccoli fall to about 23 cents a pound in February, down from 26 cents a year earlier, the USDA said.
Along with soaring labor, water and fuel costs, increasing fertilizer costs have been draining farmers' savings and will likely lead to higher prices for fruits and vegetables to go with separate hikes in meat, poultry and dairy.
Jim Prevor, editor of Produce Business magazine, said some produce prices are already beginning to creep up due to fertilizer and other costs, but major increases won't be seen until farmers curtail crops that become too expensive to grow.
"Eventually it's going to have to change," Jack Vessey, a lettuce and spinach grower in San Diego County, said of prices.
In the Central Valley, almond, tomato and lettuce grower Mark Borba said the twofold price increase for some nutrients could lead him to cut production.
"At some point, when any manufacturing business finds their raw-material costs exceeding the price of what they've produced, they will stop," he said.
It's been a long time since the fertilizer needs of farmers could be met by dredging a manure lagoon on their land.
These days, nutrients are processed from minerals dug from mines, such as phosphorous, or created through complex chemical procedures, as with nitrogen.
Those compounds are manufactured and sold by giant multinational companies, which are raising prices in line with demand.
