From the Wall Street Journal on May 27th:

Lofty Prices for Fertilizer Put Farmers in a Squeeze
By Lauren Etter

At a time when food prices are soaring world-wide, so is the price of fertilizer, producing huge profits for leading fertilizer makers and stirring anger among farmers in the U.S. and India….

The price of fertilizer “defies rational explanation,” says Robert Carlson, president of the North Dakota Farmers Union, one of the state’s most influential farmers’ groups. In a May 8 letter to North Dakota’s three-member congressional delegation, he accused fertilizer companies of “price gouging,” and asked for an investigation.

On Friday, Sen. Byron L. Dorgan, a North Dakota Democrat, said he is asking the Federal Trade Commission to scrutinize the industry’s business practices. Sen. Dorgan heads the Senate Commerce subcommittee that oversees the FTC.

Read more here.

As I mentioned in my post about fertilizer shocks, we are on the world market. And now it appears that the few world suppliers have the market cornered.

The silver lining in this fertilizer shock is that it seems to be a shortage that can be overcome by building increased capacity. But it will take a few years for that to happen, and for prices to ease.

Recognizing what was going on, we immediately bought two and a half months’ worth of supply to protect ourselves. We don’t like to do this. But we do have the ability to move quickly when we need to.

Sulfur is in short supply, too, maybe until the first quarter of 2009. And now other blends may be short when they have a sulfur component. There’s a lot to be aware of.