Lower Natural Gas Prices Provide Opportunity to Fertilizer Producers
20 July 2012 
The US corn price is currently above fertilizer prices, which means that the industry is in balance now, says Dr. Harry Vroomen, vice president of Economic Services, The Fertilizer Institute.
In addition, natural gas prices are down, which means there is an opportunity for US fertilizer production to increase. Natural gas is a major input in ammonia production.
International producers from countries such as Egypt are looking to open ammonia production facilities. However, the industry is highly regulated and time, combined with the capital needed to open a plant, could present a problem.
It can take four years for a new plant to open, according to Dr. Vroomen. “The timeline is not to be taken lightly if you don’t know the environment.”
However, the future of natural gas prices is in question, primarily considering no one can predict what will happen in three years. The high volatility of crop prices, environmental legislation restricting fertilizer use and global demand are all factors to consider, he says.
Read a global fertilizer update in the August issue of Farm Chemicals International.
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