AMES, Iowa — Fertilizer prices have been soaring over the past year, but in recent months the cost has started to come back down again.
According to ISU Economist Dr. Chad Hart the price a year ago was $750 a ton. In January it soared as high as $1,600 per ton. This month the price dropped back down to around $1,200 per ton.
“Where we’ve seen the biggest price rise, and the biggest declines over the past year has been in nitrogen fertilizer,” said Hart. “That’s the one that’s truly tied to what’s happening in natural gas.”
Hart said natural gas prices are expected to rise again this winter, which will again bump fertilizer prices up.
“Our farmers we always felt that when our commodity prices went up someone always wants a bigger piece of the pie, so we were kind of not really surprised by the increase in fertilizer prices,” said Kelly Nieuwenhuis, an O’Brien County Farmer. “When our commodity prices doubled years ago but our fertilizer prices went up by as much as 400% they got a bit aggressive and a bit greedy.”
Hart said the price spike was connected to urea and nitrogen, which use natural gas. He said potash which is mined has not seen the high spike in price. But the rising cost of natural gas is the biggest factor in fertilizer prices going up.
“It’s a combination of factors you can figure part of it was actually linked to COVID-19 and some of the supply chain issues they created,” said Hart ‘You throw on top of it the war in Ukraine, and the fight over gas and oil supplies throughout the globe.”
On the Nieuwenhuis farm, they are experimenting with using less and less nitrogen.
“Our farm we have like 12 different trials this year,” said Nieuwenhuis. “I’ve got two farms I’ve got nitrogen studies been done with Premier Ag at Iowa State University.”
The goal is to find the sweet spot where crops do well using the smallest amount of nitrogen.
Nieuwenhuis is counting on new technology to help use less nitrogen.
“I know in our farming operation. we are reducing our Nitrogen use quite a bit over the years,” said Nieuwenhuis. “We have found ways with technology to use less and still produce more.”