Global Demand, ethanol and natural gas prices are the primary drivers behind high fertilizer prices, says Ford West, president of The Fertilizer Institute (TFI). In fact, they have contributed to the highest fertilizer prices on record.

TFI points out that natural gas accounts for 75 to 90% of the cost of producing a ton of ammonia (the building block for all nitrogen fertilizer). Ammonia production costs have increased 172% since 1999 due to skyrocketing natural gas prices. Twenty-five U.S. fertilizer production plants closed due to these high prices, and the U.S. now relies on imports for half of its nitrogen supplies.

Average fertilizer prices in August were 116% higher than they were in 1990 to 1992, according to USDA. In addition, fuel prices in August were up 161% from the 1990 to 1992 period.

The possible unavailability of potash also has become a concern. In October, Reuters reported that the Potash Corporation of Saskatchewan was suspending new sales due to problems at Silvinit, a major potash producer based in Russia. A sinkhole caused by mine flooding was threatening the railway that Silvinit uses to ship potash. The Potash Corporation of Saskatchewan, the world's largest fertilizer company, said in October that it would honor existing shipping agreements but would not make new sales to North American customers until it learned more about the situation in Russia.

Contributing to the potash situation is growing demand from Asian and Latin American markets and a weakened U.S. dollar, which makes Asian and Latin American markets more attractive to potash manufacturers.

Tighten fertilizer use

Soil fertility experts and ag retailers recommend some actions to take to reduce fertilizer costs.

John Sawyer, extension soil fertility specialist, Iowa State University (ISU), says to use university guidelines for nitrogen (N) application developed for your region. Do not over-apply. Use the Corn N Rate Calculator (extension. to help adjust to rapidly changing N fertilizer and corn grain prices.

Sawyer also recommends accounting for all nitrogen applied in ammoniated phosphate fertilizers, starters, weed and feed, and animal manure. And account for corn in rotation with soybean and forage legumes.

Test your soil for phosphorus (P) and potassium (K), he adds. If soils test high to very high, you can reduce rates and withhold applications until soil tests show P and K have dropped to levels where fertilizer is needed.

The use of yield monitors in the fall can help you better determine where you need to put the most or least fertilizer, suggests Bob Williams of Frontier FS Cooperative, Jefferson, WI. An area where only 50 to 60 bu. of corn/acre were harvested, for example, is going to need less fertilizer than an area with higher yields.

Side-dressing is an efficient use of N, Williams says, but adds there is generally not enough equipment available for side-dressing in a timely manner. If you wait to side-dress and experience a rainy spell, you might be unable to apply any N at all.

The closer to side-dress time N is applied, the more efficient it will be utilized, reports James Camberato, associate professor, soil fertility and plant nutrition, Purdue University. “Instead of adding extra N to early preplant N applications, fertilize later or side-dress at the recommended rate,” he says.

Anhydrous is generally less expensive per pound of N than 28% urea-ammonium nitrate (UAN), so if you have equipment for both, you should use anhydrous, Camberato says. “In most situations, anhydrous will be as good as or better than 28% UAN since N loss from anhydrous is usually less,” he points out.

Camberato also recommends incorporating 28% UAN or urea into the soil whenever possible to reduce the loss of ammonia. “If incorporation is not feasible, band rather than broadcast the fertilizer to reduce ammonia loss,” he says. “This is especially important in no-till cropping systems where ammonia volatilization from urea-containing fertilizers can be as much as 30% with broadcast applications and 10% with banded applications.”