Testifying before a House Small Business subcommittee on behalf of the American Farm Bureau Federation, Missouri farmer Hal Swaney said increased energy costs over the 2003 through 2004 growing season have cost farmers more than $6 billion in added expenses to produce the food and fiber for this country.
“It is essential that we have access to reliable and affordable energy inputs, including gasoline, diesel, electricity and natural gas,” said Swaney, a member of the Missouri Farm Bureau board of directors who owns and operates a beef, row-crop and tobacco farm.
Swaney said that natural gas is particularly important to agriculture because it is the base stock for the production of a range of farm inputs, including nitrogen fertilizers, crop protectants, and electricity for lighting, heating, irrigation and grain drying.
“Natural gas accounts for nearly 90% of the cost of nitrogen fertilizer,” Swaney said. He told members of the subcommittee that his cost for purchasing nitrogen-based fertilizer jumped to $400/ton in the spring of 2004, a 48% increase from 2002.
Swaney said 11 ammonia nitrogen fertilizer plants in the United States have permanently stopped production since 2000, representing a loss of 21% of domestic capacity. See articles in the upcoming October issue of Farm Industry News for more in-depth coverage of how natural gas prices are changing the fertilizer industry and how farmers are adapting to higher fertilizer prices.