NCGA CEO Discusses Natural Gas Issues, New Uses for Corn at Fertilizer Institute Meeting
(10-29-04)
Increasing natural gas and fertilizer prices are affecting the profitability of corn producers across the country, National Corn Growers Association (NCGA) CEO Rick Tolman told attendees at this week’s Fertilizer Institute annual meeting in Annapolis, Md.
According to conference speakers, the pricing outlook for natural gas, which accounts for 70 to 80 percent of the cost for most fertilizers, is not positive. Natural gas prices have nearly doubled since 2002, when the average wellhead price was $2.95.
“The average wellhead price in 2004 is $5.52 and the prediction for 2005 pricing is at $5.56,” he said. “The bottom line is there seems to be no relief in sight for the foreseeable future. Behind the natural gas forecast is the rising level of demand and the decreasing availability of a domestic source.”
Increased natural gas prices have already had an adverse effect on farmers due to higher production costs, and will continue to do so in the future, Tolman said.
“Growers rely on affordable natural gas as feedstock for fertilizer, but also energy for irrigation, powering farm equipment, drying grain and producing ethanol,” he said. “Whether used directly as a feedstock or for heat and power generation, reasonably priced natural gas is essential to grower profitability.”
The conference also covered the outlook for new technology and featured a series of speakers from fertilizer production companies, universities, machinery producers and construction groups discussing analysis and identity of future trends in agribusiness.
Tolman also highlighted the new trends in corn utilization and the new products available that are made from corn. Tolman said there are new product developments every day from corn, noting that there are more than 600 corn-based products, ranging from biodegradable spoons, plates and cups to shirts and bedding materials.
According to Tolman, the group also discussed the newly formed Fertilizer Education Foundation. The foundation’s mission is to raise public awareness of the fertilizer industry and to gain public support. Tolman noted that this is a great example of the growing efforts to promote all aspects of the agricultural industry and to educate consumers who benefit from agriculture.