Something about the price of fertilizer doesn’t smell quite right to farmers. Growers in the Rocky Mountain region have asked the U.S. Department of Agriculture to investigate possible price fixing in the chemical-fertilizer industry.
It’s not just that fertilizer prices are near record highs, farmers say. The bigger concern is that natural gas, a main feedstock for nitrogen fertilizers, is priced near a 10-year low.
Farmers believe that low prices of natural gas should be reflected in their cost of fertilizer.
The price of anhydrous ammonia, a common nitrogen-based agricultural fertilizer, hasjumped 50 percent since 2006. But during the same period, natural gas prices have fallen by 60 percent.
“Historically, cheap natural gas equals cheap anhydrous ammonia,” said Yuma County corn farmer Mike Bowman. “But we have seen that correlation disappear.”
The Rocky Mountain Farmers Union, representing growers in Colorado, New Mexico and Wyoming, announced at a recent convention that it is asking for a price-fixing investigation.
The disconnect between natural gas and fertilizer prices “is siphoning millions of dollars from the U.S. agriculture economy,” the farmers organization said in a statement.
The USDA did not respond to questions Wednesday on the farmers’ concerns of price fixing. A representative of the Fertilizer Institute, a Washington, D.C., association representing the industry, did not return calls.
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Manure is spread on a cornfield at Eckhardt Farms in Weld County. Owner Dave Eckhardt uses manure and nitrogen fertilizer, the cost for which is near a record high. (Helen H. Richardson, The Denver Post)