Fertilizer costs going up with natural gas prices

TULSA, Okla. (AP) _ Skyrocketing natural gas prices are expected to hit farmers this spring where it hurts the most _ in their fields and pocketbooks. <br><br>Farmers will likely pay up to one-third more

Wednesday, January 3rd 2001, 12:00 am

By: News On 6

TULSA, Okla. (AP) _ Skyrocketing natural gas prices are expected to hit farmers this spring where it hurts the most _ in their fields and pocketbooks.

Farmers will likely pay up to one-third more to fertilize spring crops because the high cost of natural gas has forced several fertilizer plants to curb production or shut down temporarily.

``The analysts that I've followed don't anticipate it getting any cheaper,'' said Kim Anderson, an Oklahoma State University professor of agricultural economics. ``However, prices tend to move in cycles.''

Fertilizer manufacturers are passing the high cost of gas on to their customers, said Sheryl Callison of Agri-Nutrients, Inc.

Fertilizer prices have ``gone through the roof,'' she said. The price of nitrogen fertilizer has risen about $30 a ton over the last two weeks.

Terra Nitrogen, a Sioux City, Iowa, company which operates a nitrogen fertilizer plant at the Tulsa Port of Catoosa, has been running at half capacity since Dec. 1. The plant will continue at half capacity through January because of the high cost of natural gas used in making fertilizer, officials said.

The high natural gas prices are preventing Terra from generating positive cash flow at most of its plants in North America, said Michael Bennett, Terra's chief operating officer.

``We are keeping all of our facilities staffed so that we can resume production quickly as we believe warmer weather will likely cause a significant natural gas price decrease,'' Bennett said.

Terra's Tulsa facility uses about 34 million British thermal units of gas to make a single ton of ammonia, which is converted into nitrogen fertilizer. The plant produces about 1 million tons of ammonia each year.

Natural gas prices are three times higher than last year per Btu.