By SHELLY STRAUTZ-SPRINGBORN

Michigan Correspondent

GREENVILLE, Mich. — With commodity prices largely flat, fertilizer prices have edged up this spring.

“Pretty much every fertilizer across the board is up in price to some degree,” said Jacob Gebhardt, manager of Crop Production Services in Greenville. “I would say 10 percent is a good average.”

Prices quoted in central Michigan are ranging in the $325-$335 per ton range for potash, $350-$375 for urea and $306-$325 for ammonium sulfate.

“What they tell us is the price change is due to the global market,” Gebhardt said. “We haven’t had as many imports from other countries on nitrogen as we have in the past. That’s a lot of what’s driving this. There’s more fertilizer consumption in the world. The U.S. doesn’t run the game anymore.”

Jim Hilker, professor and associate chair for undergraduate programs in the Department of Agricultural, Food, and Resource Economics at Michigan State University, said price fluctuations for fertilizer are in line with fluctuations in commodity prices.

“It looks like commodity prices will be a little higher this year than last year,” he said. “Corn prices for the country this year are expected to average $3.35 per bushel. They averaged $3.36 last year.

“Until there’s another demand shock, which you can’t really forecast, we’re going to be in a tight margin time. I think we’re going to work our way back up into the high $3s. I think we’re kind of going into a long time of prices settling into that $3.80 arena, which does not cover costs until we get some rents to come down a little bit.

“I’m not sure what’s driving the fertilizer prices this year, but over time, margins drive it. In any one year, you’ll have an effect, but that doesn’t set it because you have supply and demand on both the inputs and the commodities,” he added.

With projected planting reports showing that about 2 million fewer acres of corn and 1 million fewer acres of soybeans are expected to be planted in the United States this year, Hilker suspects fertilizer companies have cut back some on their supply, which may be a factor impacting prices to farmers.

“Fertilizer companies make their decisions early,” he said. “My guess is they purposefully cut back some because there’s supply and demand on each input along with the output.”

Gebhardt said even though fertilizer prices are up a little, he doesn’t expect the cost to cause farmers to cut back on their use.

“I would say most people aren’t going to cut back a lot. I think the cutback already occurred a couple of years ago. At that time, farmers cut things out of their budget that didn’t need to be there as much as they possibly could,” he said.

“I think there’s more optimism now than there has been in the last couple of years because the futures prices are higher than we have seen them in quite a few years for both corn and soybeans. I would say that farmers are probably a little more hopeful right now than they have been.”

Uncertainty in the market due to ongoing uneasiness about trade tariffs may also be playing a role in this year’s price structure.

“I’m sure it has affected it some,” Hilker said. “I’m not sure it has gone on quite long enough that it is affecting this year’s supply, but in the long term, I think it will affect it. Uncertainty has a cost to it all by itself. People will tend to do a little less, the more risky and uncertain the market is.”