OMAHA (DTN) -- According to retail fertilizer prices tracked by DTN for the fourth week of July 2011, the costs for urea and anhydrous are moving higher. While prices for the two nitrogen fertilizers climbed since June, the amount of that increase has tapered off compared to what has been seen in previous weeks.

Anhydrous led the way, up 6% compared to the fourth week of June and averaged $789/ton. Some retailers have begun to post fall anhydrous prices, which tend to be higher.

Urea prices also gained 5% compared to a month earlier although the fertilizer was up double-digits the last several weeks. The dry fertilizer has been higher in recent weeks with concerns about world supply issues. Urea averaged $576/ton.

Four other fertilizers -- MAP, DAP, potash and UAN32 -- all gained in price compared to the previous month. MAP's average price was $718/ton, DAP $693/ton, UAN28 $409/ton and UAN32 $446/ton, according to retailers surveyed.

Two fertilizers had slightly lower prices compared a month earlier. 10-34-0 averaged $808/ton while UAN28 was at $409/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.63/lb.N, anhydrous $0.48/lb.N, UAN28 $0.73/lb.N and UAN32 $0.70/lb.N.

In a recent report titled "Cost-of-Production Report: The Rising Cost of Inputs," American Farm Bureau Federation (AFBF) economist Matthew J. Erickson analyzed how higher energy and fertilizer costs are major factors in 2012 farm budgets.

"One reason fertilizer prices have increased is demand for fertilizer, given the current tight supplies for grain commodities, primarily corn," Erickson wrote. "In the current situation of tight supplies for grain, fertilizer is a necessity as acreage production in the U.S. is at a max. Similarly, higher grain prices increase the demand for fertilizer in international markets."

Erickson examined recent corn prices, natural gas prices and anhydrous ammonia prices.

Natural gas is a key ingredient in anhydrous but since August 2010 anhydrous prices began to increase along with corn prices while natural gas prices decreased. Low corn stocks created a higher demand for corn acreage for the 2011 planting season and this situation created a higher demand for nitrogen fertilizer, Erickson said.

He expects anhydrous prices to increase slightly through 2012.

"By looking at the Energy Information Agency forecast for natural gas prices, prices are not expected to increase drastically through 2012," Erickson wrote. "However, with stocks to use for corn expected to be relatively low for the 2011-12 marketing year (currently projected at 6.4 percent), expect corn prices to stay above average, followed by slight increases in anhydrous ammonia prices."

To read the entire AFBF report visit http://www.fb.org/….

All eight major fertilizers are now showing double-digit increases in price compared to one year earlier. Leading the way higher is 10-34-0. The starter fertilizer has skyrocketed in recent months and is now 103% higher compared to the fourth week of July 2010.

UAN28 has climbed 61%, anhydrous 60%, UAN32 58%, urea 52% and both DAP and MAP 38%. Potash brings up the rear but is 27% more expensive than one year earlier.

DTN Pro Grains subscribers can find current retail fertilizer price in the new DTN Fertilizer Index on the Fertilizer page under Farm Business.

DTN collects fertilizer prices from just over 200 retailer locations weekly. Not all fertilizer prices change each week. Prices are subject to change at any time.

DTN's average of retail fertilizer prices from the fourth week of the month ($ per ton).

Russ Quinn can be reached at russ.quinn@telventdtn.com

(MT\GH\SK)

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