NCGA
Concerned Over Natural Gas Crisis; PRX's Hudson to Address Issue at
Corn Congress (7-09-03)
Extreme volatility
in the U.S. natural gas market is causing massive spikes in the price
of fertilizer and has the National Corn Growers Association (NCGA)
concerned. According to numbers released by The Fertilizer Institute
(TFI) at its recent Natural Gas Summit, 11 ammonia plants representing
21 percent of the U.S. capacity have been closed since 2000 when the
crisis began.
NCGA Chairman
Tim Hume said the effect on the nation's corn growers has been severe.
"We're seeing nitrogen fertilizer prices increase by 50 to 75
percent over last year and double what we've seen just a few years
ago," said the Walsh, Colo., corn grower. "It's being caused
directly by an increase in natural gas prices, which seem to be related
to new electrical generation using natural gas as fuel."
Natural gas, the
primary feedstock in the production of almost all commercial nitrogen
fertilizers in the United States, accounts for 90 percent of the total
cash cost of the production of ammonia, the basic building block for
nitrogen fertilizer production. Natural gas prices have been volatile
over the past three years and are approximately 150 percent above
the 1990s average of $2.40 per million British thermal unit (Btu).
Dr. Robert McIntyre,
NCGA interim director of production and economics, said NCGA is taking
steps to educate growers on the issue, as well as providing growers
with suggestions as to how they can let their collective concerns
be known in Washington, D.C.
"We've scheduled
Bill Hudson, the president of ProExporter, to come July 14 during
Corn Congress in Washington, D.C., to talk to our growers about the
situation," said McIntyre. "This way, those growers can
go back to their respective states and pass the information on and
hopefully, we can develop a better understanding of this problem in
all states."
Hume also stressed
the importance of growers getting involved in the process. "To
prevent the prices from climbing further, growers can look at alternative
sources besides domestic ammonia production, such as livestock waste,"
he said.
"We also
need to pass an energy bill containing policies to increase the natural
gas supply. Growers need to contact the energy bill's conferees to
let them know natural gas is an important part of our operations and
we need a stable, steady supply."