Farm crops need nitrogen to grow and produce. But when
nitrogen-based fertilizer prices
grow along with the plants, farmers want to know why.

The answer: the law of supply-and-demand.

“Nitrogen prices are up at least 20 percent,” said
Glen Harris, an agronomist
with the University of Georgia Extension Service. “That’s
compared to last year’s
prices. And the increase will probably continue through this
year.”

How much more a farmer pays for his fertilizer, he said,
depends on where and when he
buys it. But everyone will likely see the price go up.

The demand for nitrogen-based fertilizers depends on how many
acres of certain crops
farmers plant, Harris said.

Corn, cotton and pastures or hay are the major nitrogen-
requiring crops Georgia farmers
grow. As acreage for these crops increases, so does the nitrogen
demand.

This year, Georgia farmers expect to plant 580,000 acres of
corn, an increase of 45
percent over ’95.

Of all the crops that need nitrogen, corn requires the most.
“About 40 percent of
the nitrogen farmers use goes onto corn,” Harris said.

Based only on corn acreage, Georgia farmers need 43,000 tons
of nitrogen.

“Some may not need the entire base rate, due to some
remaining nitrogen in the
soil,” Harris said. Others use poultry litter to meet some
nitrogen needs.

Demand always increases, too, during the spring planting
season, he said.

This year, though, not only is demand unusually high, but the
supply is tighter than
normal.

Extension economist Forrest Stegelin said much of the
nitrogen U.S. farmers use comes
from the former Soviet Union.

“They’ve learned about market forces and a capitalistic
economy over there,”
he said. And to make sure they have ample supplies for their own
farmers, Russian
officials have cut back nitrogen exports.

As Russian exports decrease, supply tightens, demand
increases — and prices go up.

“Wholesale prices haven’t gone up yet,” Stegelin
said. “Retail prices
have gone up in expectation of the future increase.”

Stegelin said rising transportation costs, both abroad and in
the United States, have
added to the price increase. But he and Harris both said
fertilizer cost hikes aren’t out
of line with other farm costs.

“It’s really just catching up with other inputs such as
farm machinery, other agricultural chemicals and wage rates,”
Harris said.

Farmers who have already bought fertilizer for spring-planted
crops got in just under
the wire. But those who waited or need to buy more may face
higher prices.

The supply may be tight for a while, too, Harris said. U.S.
nitrogen-producing firms
have been running at or above capacity since 1990. And no new
plants are being built.

Nitrogen, no matter how much it costs, remains one of the
most important chemicals
farmers use.

“Without an adequate nitrogen supply, crop yields drop
dramatically,” Harris said.

He said farmers should apply the amount of nitrogen
recommended in soil test results.
That amount, from 120 to 180 pounds per acre for corn, is based
on field trials and
long-term crop research.

Harris said research has shown nitrogen to be the nutrient
corn needs most. Using too
little causes the biggest losses in yields and quality.

But just because the required rate is good, he said, twice as
much isn’t better. Any
extra nitrogen won’t help the plants at all.

And rising prices are reminders, he said, that any wasted
money is more than enough.