Fertilizer prices projected to be up this spring
Farm chemicals could take a bigger bite out of agriculture production profits this year.
Andrew Swenson, farm management specialist, said urea and anhydrous ammonia prices are up about 20 percent over last year. Prices of other fertilizers also are up to a lesser extent.
It’s a global market and all these commodities so although U.S farmers are facing tough markets, that’s not necessarily the case in other parts of the world, Swenson said. That creates a demand for the global product that puts pressure on prices.
About half the nitrogen-based fertilizer used in North Dakota is made at the Great Plains Synfuels Plant near Beulah. Dakota Gasification Co. produces anhydrous ammonia, urea and ammonium sulfate from carbon monoxide and hydrogen generated by gasification of coal and from nitrogen extracted from the air. It is just one of the products produced at the plant.
Gasification occurs with coal combustion in an environment of insufficient oxygen to sustain a flame. The resulting synthetic gas is a mixture of carbon monoxide, hydrogen, carbon dioxide, methane and water.
North Dakota’s annual nitrogen-based fertilizer consumption is about 750,000 tons. Dakota Gasification Co. produces about 400,000 tons a year. One ton of ammonia requires about 1.5 tons of coal, according to the North Dakota Lignite Council.
Annual U.S. consumption of ammonia from 2012 to 2016 was about 13.7 million metric tons, of which 87 percent was consumed as fertilizer, the Lignite Council reports. From 2017 to 2020, it is expected that 3 million tons of annual production capacity from natural gas will be added in the United States and that this additional capacity will reduce ammonia imports.