High natural gas prices aren't just affecting home heating bills. Natural gas is the basic component in producing anhydrous ammonia, the most common source of nitrogen fertilizer, and high gas prices are making production unprofitable. At the end of December, about 38 percent of fertilizer production across the country had been idled, and predictions were for other plants to shut down.
With unknown availability, suppliers are reluctant to lock in prices for spring delivery to retailers and farmers, possibly affecting the spring corn planting season. Some farmers may opt to switch to crops that don't need the fertilizer, such as soybeans, to avoid the uncertainty.
Minnesota produces the fourth largest corn crop in the nation and used more than 600,000 tons of nitrogen as fertilizer in 2000. And even if fertilizer were available, costs already roughly 50 percent higher than a year ago are expected to soar—some predict by as much as an additional $100 million overall.
—Kathy Cobb
