Fertilizer Price Increases Likely

For the last month or so, fertilizer manufacturers have been warning of increases. It appears that the components to make fertilizer this spring will be seeing an increase. In the past, natural gas and fuel prices have been responsible. This time the increase is mainly due to the world wide demand for corn and corn based products. The increased production of Ethanol is making corn a very profitable crop recently.

The increased demand for corn is using record amounts of fertilizer and depleting supplies of the components in fertilizer. Because Ethanol is depleting corn stocks, all other corn bases products are also seeing increases. This is also causing price spikes for Grain for farmers and corn syrup (for everything).

Manufacturers of fertilizer now have to go out into the marketplace and buy fertilizer components at the new market price. These prices are becoming much more expensive. Simple supply and demand here folks.
Less supply = more demand and that in turn means more expensive.

This will be industry wide and I don’t believe any company or manufacturer will be immune to the increases.

What to do about it?

Because most manufacturers have supplies to make fertilizer until about April, this creates a buying opportunity with some vendors. I would be talking to my fertilizer supplier about ordering early before the increases in April and May.

You may be able to avoid some increases if you can buy/commit to future purchases now.

Another strategy is to take a look at your lawn care program. See if you can modify your materials and timing to be able to take advantage of different products. If you are applying 5 apps of fertilizer to your customers lawns, maybe you can use different analysis products to achieve your 4 #’s of Nitrogen yearly.

Notice I didn’t say cheaper. You don’t necessarily need to use “cheaper” sources. You might even find better fertilizer sources that might be more cost effective and profitable than what you are using now.

Some materials may see smaller increases if any. Adding some of the organic materials into you fertilizer may help to keep costs flat. I know that I have the ability to blend products that have 25-50% organic materials of different sources, with traditional fertilizer components.

The lawn and soil love the organic based products and by combining N P K with some organic, results aren’t slow, and you may help to avoid any increases.

At this point I am not sure how much or what will see the most dramatic increases. The main point I am try to stress is this:

Now is the time to talk to your fertilizer suppliers to see what the can offer you. I’m speaking In terms of pricing programs or advice on more profitable choices than you are currently using. Any choices should not reduce the quality of your service though. Higher quality can be achieved at the same time as profitability.

If your Supplier is simply quoting prices and can’t help you to identify and choose quality , more profitable materials for your customers, then maybe its time to find another supplier.

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