Posted September 30, 2018 09:27:52 By Jim Fagan | NJ.com Staff WriterNew Jersey farm owners will be scrambling to find bargains on the horizon as the state’s fertilizer prices hit record highs.
While the supply of nitrogen fertilizer has increased steadily in recent years, prices for the crop have remained relatively steady at around $1 per pound of fertilizer, according to the state Department of Agriculture.
But now that prices are higher than ever, the demand for fertilizer has exploded in recent months, with prices up nearly 40 percent from a year ago.
The increase in demand has been accompanied by a surge in prices for fertilizer, which is produced from manure and has become a major crop in the Garden State.
According to the DDA, the average price of fertilizer for farmers was $2.99 per pound in the first quarter of 2018, up 25 percent from the same quarter a year earlier.
In the first three months of 2019, fertilizer prices were up a whopping 70 percent, to $6.50 per pound.
In contrast, nitrogen prices have been falling steadily, dropping more than 40 percent in the past three months.
The state’s Department of Environmental Protection, which regulates fertilizer production, has been slow to react to the growing demand for nitrogen fertilizer.
DEP spokesman Steve Dominguez said last week that the agency is continuing to monitor the market for fertilizer and other agricultural products.
But, he said, DEP has “seen a lot of demand in the nitrogen fertilizer market,” and is considering new regulations in the future to prevent a repeat of the price spike.
Dominguez declined to discuss the specifics of DEP’s efforts to control the nitrogen market, but he said he would say that the state has made “significant investments” in nitrogen regulation in the state.
In the first six months of 2018 alone, the state added more than $3.4 billion in fertilizer regulation to prevent overuse and to address the spread of plant diseases.
That investment has also contributed to a 30 percent drop in nitrogen fertilizer prices over the past two years, according Domingue.
At the same time, Dominguis said, farmers are facing increased costs for equipment needed to harvest the crop.
While he said the state is working to find ways to make nitrogen fertilizer available to farmers who can’t grow it, the cost of equipment and supplies are rising fast.
“We’re also seeing more and more people taking the opportunity to grow the crops that they’ve been growing, which means they’re also adding to their supply,” he said.
The number of farmers growing nitrogen fertilizer in New Jersey rose by nearly 4,000 from the year before, the largest increase in state history.
While the price of nitrogen fertilizers is up by a fraction of a percent this year, Domenos said that is largely because farmers are taking advantage of the new supply, which they could not have had a year before.
“It’s just really a great opportunity for the farmers, for us, and for the state to really make a difference in their farm situation,” he added.
“If you’re going to grow a nitrogen fertilizer crop, the way you’re growing it is to let the soil hold the nitrogen, and you’re also going to let your soil soak up all the water and keep it from leaching out,” Domenas said.
For now, New Jersey farmers can continue to buy fertilizer at a lower price because the state hasn’t introduced any new rules to make it easier for farmers to buy the crop at higher prices.
But Domen said that would change in the near future.
Domenos also warned that some of the biggest players in the fertilizer market have already jumped into the market and are now asking farmers for a little more than they paid for the fertilizer.
He pointed to a recent example: fertilizer company Cargill, which in March agreed to buy a growing company from fertilizer giant Procter & Gamble for $3 billion.
The Procters & Gamble purchase will give the fertilizer giant a presence in the New Jersey fertilizer market, a major contributor to the market’s price.
“You can’t have this amount of fertilizer and not have this quantity of fertilizer farmers can’t produce,” Domingos said.
“It’s going to be an amazing opportunity for us.”
In some areas, the new fertilizer will help farmers make up for the loss of nitrogen they are losing due to crop diseases.
In New Jersey, the fertilizer is now being used by nearly all farmers, with the average amount being 3.7 tons per acre.
The new supply of fertilizer will also help with nitrogen fertilization.
Domena said that he expects the market will continue to see an increase in nitrogen prices over time, with farmers now paying more for fertilizer.DOMINGUIS: Farmers in New York state are buying fertilizer at $3 per pound as state’s supply increasesThe state Department for Environmental Protection also said last month that the cost for nitrogen fertilizing in New Yorkers has gone up 40 percent