Farm Bureau Policy Development Fact Sheet No. 4 — 2012 COTTON PROBLEMS AND ISSUES FERTILIZER PRICES 2012 has been another year of volatile fertilizer prices. Price seems to have little relationship to the cost of production (for example: natural gas price levels are hovering between $2 and $3 per 1,000 cubic feet – well below 2008 when price exceeded $10) but are set relative to what the traffic will bear. Prospects of huge corn plantings were a warning for strong nitrogen demand. Yet price did not appear to be related to short supplies, because there were ample supplies of nitrogen but not where it was needed, when it was needed. Industry consolidation has left a few companies in control of not only production in the United States, but seemingly in control of imports as well. As few as three companies control 60 to 80 percent of all the fertilizers. Additionally these companies market worldwide and can export fertilizer to other major using areas at price levels generally lower than in the United States. New production is coming on board, not with new people, but an expansion of existing producers. High startup costs and a network of permitting seem to be restricting new companies entering what appears to be a very lucrative business. Strong profit potential should attract new business. Related Policy: Fertilizer N-338 1. 2. 3. 4. 5.
What should be done to change this? Is it a matter of collusion, or antitrust? Is it a matter for a Department of Justice inquiry? Is it a congressional or legislative issue? What about a study of the fertilizer industry and pricing practices by a national blue ribbon committee?
WEED RESISTANCE Weed resistance continues to be a major problem for cotton producers. More preemergence residual type herbicides are being used. However, there has been little work done for some time to develop new weed control chemistry. Related Policy: Cotton research 104 1. What can be done to stimulate more work on new weed control chemistry?