ENOUGH IS ENOUGH

If you haven't adjusted your rates to compensate for rising fuel costs this season, you may want to pull the calculator back out and start doing some figuring. The cost of doing business just went up. Obviously, you're going to be paying more each time you fill the tanks of your equipment, but you're also going to be paying more for the fertilizer you use on the grounds you manage. Natural gas is the feedstock for nitrogen production and its cost represents 70 to 80 percent of the expense of producing ammonia, the building block for all nitrogen fertilizer products.

In March, the unusually colder weather coupled with the uncertainty of war to drive up the price of natural gas as demand spiked. This coincided with a lower-than-normal amount of gas in storage to put an even greater pressure on prices, which neared an all-time high. And even though prices dipped slightly in April, they are still higher than they were a year ago. Experts aren't predicting the prices to dramatically drop.

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The current energy situation is having a dramatic negative impact on a majority of the U.S. fertilizer industry, prompting The Fertilizer Institute (TPI) to renew its call for swift congressional passage of comprehensive energy legislation. “TFI has long advocated the need for a national energy policy that increases the supply and decreases the price volatility of natural gas,” wrote TFI President Kraig Naasz in letters to the chairmen and ranking members of the House Committee on Energy and Commerce and the Senate Committee on Energy and Natural Resources.

While TPI fights for new legislation, it's unlikely to have an immediate impact, and most certainly a resolution won't be reached in time to affect what you're going to pay for fertilizers this season. B.J. Bilas, marketing manager and manager of field development for Nu-Gro Corp., says that higher production costs will be reflected, to some extent, in retail prices. “We don't pass on all of the cost increase, we eat a large portion of it ourselves. But we are forced to pass on some of the increase due to much higher production costs,” he says.

So as you look at your budget this year, it also is a good idea to re-evaluate your fertilization program. You might not need to buy as much as you think, which could save you a bundle during a year like this. To get a better idea about how much nitrogen fertilizer you'll need, check out what the experts recommend. Peter Landschoot, Ph.D., Pennsylvania State University, and Grady Miller, Ph.D., University of Florida, outline how much nitrogen turfgrasses need in “Feast or Famine Fertility,” on page 14 of this issue.

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© 2014 Penton Media Inc.

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