I want to link to an article written by Ann Keller, director
of new services for the American Farm Bureau. The short article discusses the
upcoming expectations for fertilizer production and demand in the United States
and is titled: Harvest
Season Thoughts Turn to Spring Fertilizer Prices.

In short, global supplies are expected to be tight because developing
countries are competing for fertilizer in order to secure yields. If supplies
remain tight, it is going to cost farmers more money to fertilize their crops. As
this article notes, many countries-including the United States,
cannot produce enough local fertilizer to supply their farms. Again, since fertility has
to be imported, the food system is threatened by rising energy prices
for transport and freight. This highlights an intrinsic vulnerability in the
global food system which does not seem to have much flexibility to absorb
disruptions in necessary imports of fuel, food, and fertilizer.

Here are some noteworthy quotes from the article:

--“The U.S.
imported about 57 percent of its nitrogen last year, compared to 31 percent in
the 1999/2000 growing season. One reason for the import increase is rooted in
the price of natural gas, nitrogen fertilizer’s key ingredient. Trinidad, a
tiny island in the Caribbean, has an abundant supply of natural gas, and it
manufactures anhydrous ammonia more cheaply than the U.S. Trinidad is expected
to be this country’s largest supplier of anhydrous for some time to come, while
other popular nitrogen fertilizers such as urea are imported from Russia and Eastern Europe.”

--“While the U.S.
is a major manufacturer and exporter of phosphates, stocks are relatively low
at this time. If disruptions in the manufacture or distribution of these
fertilizers materialize, then the probability of spot market price spikes
increases. More than 90 percent of the potash fertilizer used in the U.S. is imported, the bulk of it from Canada but also some from Russia and the Congo. Given recent flooding that
affected the production of potash, this also suggests supplies may be tight in
2008.”