Fertilizer prices will impact Idaho Agriculture's bottomline--Jake Putnam photo
FERTILIZER PRICES, PROFITS AT ALL TIME HIGH
WINNIPEG-- Agrium the world's third-largest nitrogen producer says its second-quarter profits more than doubled because surging grain markets have spiked demand and prices for fertilizer.
Idaho farmer Terry Jones runs a dairy operation in Gem County, he also produces alfalfa feed for the operation, rising fertilizer costs have cuts into an already thin profit margin.
“I paid 63.5 cents a pound this past spring,” said Jones. It's a lot like gas - there has to be a point where this stops. With the way the markets are falling who will be able to take the risk next year?”
Agrium executives say rising prices have not slowed demand for their yield-boosting fertilizers. "This remains a story about food, as the world wants and needs more food production," Agrium Chief Executive Mike Wilson said.
Calgary-based Agrium's had sales receipts of $3.9 billion so far this year, that’s up from $2 billion last year.
Fertilizer makers, blenders and wholesalers will do very well in the next few years, said Steve Pinney, a vice president for operations at The Mosaic Co., a fertilizer seller based in Plymouth, Minnesota.
Terry Jones agrees saying when demand goes up so do corporate profits. “My fertilizer supplier out of Helena is quoting Nitrogen at the price of $1per pound. That’s 37-cents more than just a few months ago,” said Jones.
Nitrogen insiders say that the need for food isn’t going away. There’s only so much land out there and increasing crop yield means more fertilizer. Jones thinks he has a green solution.
“With fertilizer prices at this level it makes cow pies very valuable,” laughs Jones. “I was told at a meeting recently that a load of cow manure has $80 worth of nutrients in it; spreading cow manure might become popular again.”