Ammonia N Price Up 130% since 2000

Ammonia prices paid by farmers increased from $227 per ton in 2000 to $521 per ton in 2006, an increase of 130%, according to a new USDA-ERS report, ‘Impact of Rising Natural Gas Prices on U.S. Ammonia Supply,’ which can be found online at www.ers.usda.gov/publications/WRS0702/wrs0702.pdf.

Containing 82% nitrogen, ammonia is the main source for nitrogen in various types of fertilizers used in crop production. 

Chief author Wen-yuan Huang points out that the trend toward higher natural gas prices especially within the last decade has been increasingly squeezing gross return margins of U.S. ammonia producers and suppliers.  Domestic production capacity and supply has decreased, while imports have increased.

The volatile and upward trend in U.S. natural gas prices from 2000-06 has led to a 17% decline in the nation’s annual aggregate supply of ammonia, according to the report. During the period, U.S. ammonia production declined 44%, while U.S. ammonia imports increased 115%. Most U.S. ammonia imports are coming from Trinidad and Tobago, Canada, Russia, and Ukraine. In 2006, Trinidad and Tobago accounted for 57% of U.S. ammonia imports.