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Getting in a stink over higher fertilizer prices


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Photos by Karen Quincy Loberg / Star staff
Joe Rivas refills fertilizer that will be fixed into the soil as he plows. He said the mix cost $810 a ton, and he'll use five tons to cover about 35 acres at Santa Rosa Ranch.

Photos by Karen Quincy Loberg / Star staff Joe Rivas refills fertilizer that will be fixed into the soil as he plows. He said the mix cost $810 a ton, and he'll use five tons to cover about 35 acres at Santa Rosa Ranch.

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Rivas sits behind the wheel of a tractor that is plowing acreage at Santa Rosa Ranch. The land will eventually be planted in cilantro. Local suppliers have reported increases in the price of fertilizer.

Rivas sits behind the wheel of a tractor that is plowing acreage at Santa Rosa Ranch. The land will eventually be planted in cilantro. Local suppliers have reported increases in the price of fertilizer.

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Skyrocketing fertilizer prices are rattling area farmers, as well as suppliers who are trying to explain the escalation to customers.

"Everybody's talking about it now," said Craig Underwood, owner of Underwood Ranches in Camarillo. "We're all facing the same problem."

Growers have been hit with price leaps of more than 100 percent since fall.

The situation is to the point where the owners of Oxnard fertilizer supplier AG RX felt compelled to post a letter on their Web site earlier this month that begins: "The purpose of this letter is an attempt to prevent sticker shock."

AG RX President Ken Burdullis said he's quoting customers prices that are twice what suppliers paid a year ago.

Prices started shooting up in October as rates for fertilizer ingredients began to soar. AG RX's letter notes increases in nitrogen, 70 percent; potash, 110 percent; and phosphates, 125 percent. The letter continues that "2008 will be a year in which planning will be more important than ever."

There are multiple reasons for the spike, including increased prices for corn, soybeans and wheat — which has boosted demand for fertilizer.

Other reasons include the weak U.S. dollar, soaring oil prices, and decreased supplies coming from India and China.

The reasons cited make sense to Jack Kyser, chief economist with the Los Angeles County Economic Development Corp.

"What you've had is an unexpected boom in agricultural production," he said. "There is very strong demand for corn, which is used to produce ethanol."

As for consumers, it's unlikely that the price increases will get passed on to them, said John Krist, chief executive officer of the Ventura County Farm Bureau.

"The farmers are price takers, not price setters," he said. "Growers don't get to set the prices. They're set by wholesalers, distributors and the ultimate retailers."

When farmers' production costs rise, Krist said, "it squeezes their profit margin."

Farmers are going to need to improve efficiency to get by, said Tom Beardsley, owner of Oxnard-based fertilizer supplier Beardsley & Son.

Back at Underwood's farm, Underwood is looking at just that — improving efficiency.

The farmer also has been trying to budget for the increase, but it's tough because the price keeps changing. He had forecast a 30 percent increase but now believes that it'll be 100 percent.

"It's happening so fast they can't even keep up with it," Beardsley said.

"I think this is going to change the way growers fertilize," he added. "It's too expensive. Growers are going to have to look into this issue, whereas they maybe didn't feel like they had to before.

"Fertilizer inputs used to be a minor expense. Not anymore."

Discussions

Posted by NothingButTheTruth on March 23, 2008 at 8:30 a.m. (Suggest removal)

If the farmer is expected to stay in business, eventually he/she will have to make more money. What the story does not talk about are all the OTHER related costs that have increased: fuel (big tractors=big diesel costs), electricity = pump water feed crop, labor cost increases; equipment repair & replacement, etc, etc. And USA farmers have to compete against foreign countries where labor and other costs are MUCH cheaper AND where people don't get to b---- everytime they spray the foreign crops WE BUY with who knows what! Look at the store labels and SEE where your food is coming from... too little is from USA. With cheaper foreign food, the potential is there for the American Farmer to someday become extinct... and just like with OIL we will be depended on foreign countries and subject to THEIR prices for food!



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