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north central Oklahoma | Always consider the source. In my short little foray via google, I discoverd that it takes about 33,000 cubic feet of NG to produce one ton of fertilzer, and AA is the first in the stream. all others, ie, 46%, 28%, etc., are made from AA. At current prices of right around $6/mmbtu, that comes out to be a gas cost alone of $200/ton. Then ya gotta add all the sulfur, catalyst material, etc. and then the labor and return to capital on the plant. I think we are experiencing some price gouging, maily due to supply and demand, as so many "N" plants have shut down in the past 5 or 6 years. This may be by design, I don't know, but I do know that the $96 quote is way off base. You might offer him a bridge in Minnesota for sale, real cheap.
And these costs above are only for manufacturing, not the transportation and storage of same before we get it. Nobody does anything for free any more, don't ya know.
One final edit. Your cheap "N" source could be referring to foreign produced "N". Natural gas can be found for less than a dollar/mmbtu in places like Libya, UAE, and other net excess producing countries. There is still the issue of getting it from there to here, but I would think there could be more opportunity for gouging by importers of "N" from these sources than domestically produced "N".
Edited by Cowboycorn 8/28/2007 21:03
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Competition for fertilzer . . .is this why prices are higher?
