Helping farmers feed all those hungry crops around the world – so they, in turn, can feed us – involves “distribution logistics,” or, getting what you need from its place of origin to its place of use. With crop nutrients, this is about getting those 17 different elements critical to plant health from different sources around the world, blending them to a prescription designed for a specific crop in a specific field and applying it when the weather conditions and crop season are right. As a result, fertilizer production and use are subject to many global economic factors.
Commodity prices (prices for corn, wheat, soybeans and other crops) will affect demand for different nutrients. Farmers will decide which crops to plant based on their potential for profit, and different crops require different nutrients.
Transportation costs will affect fertilizer costs because fertilizer is a bulky and heavy product that must often be shipped great distances by a variety of carriers, including ocean-going ships, railroads, trucks and river barges. Petroleum prices directly impact the price of plant food because ships, trains and trucks run on petroleum; thus, higher oil prices increase transportation costs.
Natural gas is used two ways in the production of nitrogen and dry-prilled products such as potash and phosphate. During nitrogen production, natural gas is combined with atmospheric nitrogen to create ammonia. Next, it is used to generate the heat needed for the conversion process (approximately 1,600 degrees F). Natural gas price and availability impact production costs and decisions by affecting the supply of nitrogen that plants needs to grow healthy.