Home › Forums › Coking › News: DCU, Upgrader › 1.Coker (registered users only) › Farmers Endure Credit Crunch but 2009 could be crucial – Tripled Fertilizer Cost squeeze use › RE: Farmers Endure Credit Crunch but 2009 could be crucial – Tripled Fertilizer Cost squeeze use
Here is heads up on credit & economy crisis creating by-product crisis for Ethanol-Farming/Fertilizer-Petcoke markets. The Fertilizer industry is undergoing a third shock wave as credit crunch may force up-front payment on tripled cost.
The sharp rise in Nat Gas prices from $4.5/MMBTU to $10/MMBTU closed nearly half US plants & left 57% operating on alternate fuel (i.e. Petroleum Coke Gasifiers like Coffeyville’s) and the US shifted from a Fertilizer exporting country to an Importing one. Prices increased from $100/ton domestic cost to over $350/ton imported cost and now quoted at $1200/ton due to increased demand from shift corn from agriculture to source Ethanol for Oil industry.
All of agriculture has been impacted but the speculation of commodities & induced shortage of grain production as result of heavy subsidy & environmentally driven use of ethanol for gasoline blending even though it is not economic using grain, and yields 3-5mpg less mileage in 10% gasoline blend.
The NG demand destruction of its use in Fertilizer production (previously ~one top 5 consumers NG) had significant impact on price once several Katrina damaged NG platforms were restored. The same is thing is set to happen, but lesser extent, for both petcoke & coal consumption by Gasifiers for production of Fertilizer products. Even high price grains for use Ethanol may not help Farmers 2009 who depend on Rural Bank loans to bridge farming planting cost until harvest sales in credit tight market and debt heavy agricultural industry with low ROI.
Worse still is that the US domestic & global strength as grain producer will be put in even more stress as Liberals continue push a bad answer to higher Ethanol blend (20%) targets even though the 10% blend increased all food cost to near crisis levels and put some developing countries into starvation & famine crisis.