One of the primary authors of the 2008 farm bill is turning his attention to trying to find out why fertilizer prices have gone into the stratosphere in recent months.
Sen. Kent Conrad, D-N.D., a member of the Senate Agriculture Committee and chairman of the Budget Committee, says fertilizer prices currently are nearly three times what they were in 2000.
Conrad, fellow North Dakota Sen. Byron Dorgan and North Dakota Rep. Earl Pomeroy have written a letter to Agriculture Secretary Ed Schafer asking him to find out why prices for fertilizer products such as DAP have risen from $400 to $1,000 per ton.
“This unprecedented volatility in fertilizer prices is responsible for growing uncertainty and frustration among our nation's farmers and ranchers,” the three congressmen said.
“Even with currently strong commodity prices, income from farming is barely keeping up with increased farm input costs and, in particular, skyrocketing fertilizer prices.”
Conrad, who is credited with writing many of the changes in the Food, Conservation and Energy Act along with Georgia Sen. Saxby Chambliss, says fertilizer prices have risen to record levels.
According to USDA's National Agriculture Statistics Service, fertilizer prices in May 2008 were 69 percent higher than they were in May 2007. And the 2007 prices represented an increase in costs of 158 percent compared to May 2000.
“While some of the increase may be a result of rising petroleum costs, those factors alone do not fully explain the current escalation in fertilizer prices,” said Conrad. “The congressional delegation wants an immediate investigation into the rapid increase in fertilizer prices to assure that farmers and ranchers are not being overcharged.”
The North Dakota members are asking USDA to examine energy and transportation costs, availability of raw material, processing capacity, domestic and global demand factors, and industry consolidation. The delegation asked Schafer to report the USDA's findings to Congress once the investigation is complete.
“We hope this investigation will provide answers for our family farmers and ranchers who are extremely concerned and trying to understand the inexplicable run up in fertilizer prices,” the letter to Schafer said.
Although grain prices have risen to extraordinarily high levels — primarily due to flooding in the Midwest and rising demand from around the world — many farmers report that high input costs are cutting into margins and putting their operations at financial risk.
Farmers report that diammonium phosphate or DAP that cost them $400 per ton last year now costs $1,000 per ton. Prices for nitrogen fertilizer and phosphates are registered similar increases and growers are paying nearly double what they were last year for glyphosate.