Decreasing Price of Natural Gas May Not Translate to Lower Fertilizer Costs

The cost of natural gas going down will benefit fertilizer producers, but not necessarily farmers.

Published on: Oct 12, 2007

According to Chris McGill of the American Gas Association, the average price of natural gas should be lower this year. With the cost coming down for natural gas, which is needed in the manufacture of nitrogen fertilizer, you would think that would translate to lower fertilizer prices for farmers. But Harry Baumes from the USDA's Office of Energy says the high demand for fertilizer world-wide will keep the price for fertilizer strong in spite of the decreasing cost of natural gas.

"So the weakness of the natural gas prices is good news for the producers of nitrogen fertilizer," Baumes says. "But the consumers of those products, farmers, are probably not going to be seeing that in terms of lower costs."