DAVENPORT, Iowa — When the USDA added more corn acres for 2011, most market analysts were forecasting higher fertilizer prices for this spring’s short planting season.

But other farm experts are now predicting that volatility will likely play a major role in prices and supplies for this fall’s harvest – and even on into 2012 planting.

“Currently, world demand for all crop nutrient inputs is strong,” said Tom Leiting, general manager and CEO of River Valley Cooperative in Davenport, a member-owned grain and fertilizer supply company comprised of Iowa and Illinois producers. “All forms of nitrogen, phosphates and potash have strong support due to growing food needs and reduced world carryout of coarse grains, versus several years ago.”

While 2008 fertilizer prices drastically increased and then somewhat buoyed that fall, and 2009 prices were projected to be lower, Leiting said current markets indicate prices are up significantly from a year ago, but still down from 2008’s highs.

“This is very positive for the farmer when you look at current grain market prices versus 2008,” he said. “As price volatility has increased, manufacturers, as well as wholesalers and retailers of fertilizer, have been less willing to own large inventories that are not priced.”

Iowa Agriculture Secretary Bill Northey said although he tries not to forecast, the one constant lately seems to be volatility.

“Right now, I think a lot of folks are trying to decide if they want to buy their fertilizer early, and I have seen arguments on both sides,” he said. “Also, we do have competition from other producers around the world, including China and South America. Their demand will have an impact on the market as well.”

Now, “demand for NH3 (anhydrous ammonia) is always relative to planned corn acres,” said Clarke McGrath, field manager for the Iowa State University Corn and Soybean Initiative. He expects “they will still be up based on commodity prices, so we expect a high demand for N (nitrogen) this fall if the weather lets us apply.”

In fact, some fertilizer retailers are telling McGrath that about half of fall needs are already prepaid – and they expect N prices to rise through fall and winter.

“P (phosphorous) prices are expected to rise as well; some guys predict they will push 900 to 1,000 (dollars) per ton,” he said. “For some reason, we are told K (potash) isn’t expected to rise as dramatically as P, but you never really know; the fertilizer markets are so volatile.”

As for prices, McGrath said NH3 is projected to be between $750-$800 and headed up if farmers aren’t locked in yet; MAP is also between $750-$800 and headed up; and K is hovering around $700 and “expected to rise, but maybe not as much as others.

“A good portion of it will be fertilizer costs,” he said. “How much P and K go up depends on yields this fall to a great degree.”

McGrath added prices are supposed to be lower than fall 2008 and spring 2009, but likely above 2010 and 2011 prices. “The Federal Bank out of Kansas City says short-term operating notes are going up – something like 36 percent higher, compared to a year ago – due to higher costs expected for feed, fertilizer and fuel,” he explained.

In addition, he said the recent flooding along the Missouri River is complicating river and truck freight for fertilizer, “but this time of year, it isn’t as troublesome as it could be this fall. We have had a lot of time to work on the logistics of working around the floods over here, but there is only so much fertilizer that can be put in place due to storage constraints.

“I suspect that shipping will be a headache over here due to the flooded roads and needed repairs,” he added. “NH3 almost invariably is tight at times in some places just because if fall weather is good for applications, it is hard for logistics to keep up with so many guys running NH3 so hard.”

Although price volatility and strong offshore demand create unknowns for fertilizer supplies during harvest, Leiting said another “big unknown” in forecasting fertilizer prices and availability is determining what producers will actually use – especially into 2012.

“Our customers are concerned about price volatility in the grain markets as well as their inputs for crop production,” he said. “We are working with our customers through our grain, agronomy and energy businesses to provide ways to manage these risks together.”

Although he hasn’t yet heard of any major fertilizer supply issues, John Sawyer, ISU extension soil fertility specialist and professor of agronomy, said “prices seem to be somewhat stable, although higher than what farmers would like, and trying to figure out prices into the long-term future is always difficult.”

To add to price volatility concerns, many farmers are only beginning to recover from a barrage of inclement weather that followed a short planting season: two record heat waves, July 11’s derecho winds and flooding from the Missouri River.

“Most likely, the yield loss in the flattened areas (from the derecho) is 20 percent or less,” said Virgil Schmitt, ISU extension field agronomist, “but that is still substantial, and harvest will be a real challenge.”