Natural Gas: Domestic Nitrogen Fertilizer Production Depends on Natural Gas Availability and Prices;Report to the Congress

摘要

Higher natural gas prices have contributed to higher nitrogen fertilizer prices and reduced domestic production, but supplies of fertilizer have been adequate during periods of high natural gas prices in the past primarily because of increased imports. For example, between January 2000 and January 2001, the average price of natural gas increased by more than 300 percent, from ;2.52 to ;10.16 per mmBtu. Because natural gas is the most costly component used in manufacturing nitrogen fertilizer, the higher gas prices led to higher prices for nitrogen fertilizer. For example, between January 2000 and January 2001, the U.S. Gulf Port spot price for anhydrous ammonia, one of the most commonly used nitrogen fertilizers, increased by 144 percent, from ;119 to ;290 per ton. Higher natural gas prices during 2001 led to higher production costs for U. S. nitrogen fertilizer producers and this in turn led to a 25 percent reduction in domestic nitrogen production in 2001. Despite this significant decline in production, a USDA survey found the supply of nitrogen fertilizer was adequate to meet farmers' demand.