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 Tom Harms is the manager of
Herrin Fertilizer Inc. in Mount Pulaski, a position he’s held for 16
years. Harms has also been a stockholder in the company the past
four years. This is the first time in his career he has seen
contracts rewritten because of a sudden increase in anhydrous
ammonia prices.
“The price is much higher,” said Harms. “It’s really controlled by
the manufacturers and the pipeline. Something happened this year
I’ve never seen happen before. Our contracts were cancelled and new
contracts were written in January that were significantly higher.
I’ve never seen that in my tenure.” Harms has 20 years experience in
the fertilizer business.
“We’ve always had contracts that they’ve added storage to when we
couldn’t get the anhydrous on, but this is the first time that, I
believe, it’s ever happened where they actually cancelled them and
have rewritten them,” said Harms.
How much has the price of anhydrous risen?
“Considerably,” answered Harms.
"For anhydrous ammonia retail it probably went up about $120 to $150
a ton from December 31st to January 1st, overnight,” Harms
emphasized. “I am sure, in defense of the manufacturers, some of
this is due to they are going to have a tough Spring getting things
aligned in the pipeline and getting things stored in the proper
locations for transports, so there’s a lot of logistics that go into
the spring that normally isn’t there. It’s going to be a mad dash to
the finish line.”
So that means when the weather finally turns nice enough to plant,
farmers will want their nitrogen applied and plant corn at the same
time. For Herrin Fertilizer, Inc. that means there won’t be enough
hours in the day to cover their workload, but somehow they will get
the job done. They always do.
“Basically corn gets planted in our area, I am guessing in about 10
days, so you’re going to have to get these nitrogen products on in
front of this. Everything is gonna happen very fast or attempt to
happen very fast, I should say,” said Harms.
“Fortunately, there is
different forms of nitrogen. We sell a lot of five percent nitrogen
solution. We sell 28 percent nitrogen solution. So some of this
pressure on anhydrous will go to these markets. We are in a pretty
good position to do liquids. The price on the five percent probably
has not gone up as drastically as what anhydrous and 28 percent
solution has gone up. It’s gone up some but probably not as
drastically. It’s logistically challenged too, to get all these
solutions done, too.”
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“I know part of the concerns
are, will there be a lower application rate due to the higher cost?”
mentioned Harms.
“What we’ve learned in basic agronomy from the land grant
universities is that it requires one pound of nitrogen for every
bushel of corn grown.
"Now there’s been some research trying to get this number to flex
maybe to seven-tenths pounds of it, but everything that I have read,
we are not to that point. It’s still one pound of N per bushel of
corn.
"Now you can take some credits for your dry applications that have
some nitrogen in them. You can maybe take a little bit of credit for
your soybean stubble on first year corn. However, we cannot look
into the crystal ball to see how much nitrogen is going to
mineralize in the soil. So that’s why we use the agronomy handbook
of one pound applied per bushel of corn grown. So I don’t see that
rate changing much.
"They’ve been experimenting at land grant universities, but there’s
nothing etched in stone. Dr. Emerson Nassar spent his whole life
researching this project and he’s got a lot of great research on it,
but I am not sure a general consensus between land grant
universities has ever been reached because it’s a moving target. It
changes so much every year.”
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