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and later by the ARP and CRP programs and excess supplies (Vroomen and Taylor, 1992). Prices rose steadily from 1986 to 1989. Prices of most fertilizer materials have fallen from 1989 levels, but remained relatively stable through 1992 (Taylor, 1994). Prices paid by farmers for fertilizer in 1994-96 increased over 1993 prices due to increased planted acres and other market conditions.

The prices U.S. farmers currently pay for many fertilizer materials have risen significantly since 1993. For example, the price of anhydrous ammonia increased 64 percent from October 1993 to April 1995 to a record high of $330 per ton. Diammonium phosphate's price increased 37 percent over this time period. Other fertilizer products also increased, but not as much. Real fertilizer prices (fertilizer price index adjusted by the implicit price deflator of the United States) have declined from an index of 195 in 1975 to 110 in 1995 using 1990-92 as a base (fig. 3.1.5). In constant dollars, farmers paid 44 percent less for fertilizer in 1995 than they did in 1975.

The increase in fertilizer prices since 1993 is a result of tight world supplies and increased demand. For example, anhydrous ammonia use increased 26 percent from 1993 to 1994, and total nitrogen use increased over 11 percent due to an increase in corn acres (corn uses about 45 percent of all fertilizer). Increases in planted acres of soybeans, cotton, and rice also contributed to an increased demand for fertilizer. Nitrogen application rates on corn increased from 123 to 129 pounds per acre in 1994-95 following the 1993 flood; phosphate and potash application rates also increased. In addition, weather conditions were ideal for the direct application of anhydrous ammonia. There was also an increase in nonagricultural demand for nitrogen in products such as adhesives, plastics, resins, and rubber. During 1995, U.S. fertilizer exports increased over 1994 because of China's increased demand for diammonium phosphate and other fertilizer products.

On the supply side, several factors placed upward pressure on fertilizer prices during 1994 and 1995, including higher priced imports from the former Soviet Union, unscheduled repairs that caused plant closings, low inventories, and an explosion that temporarily closed a large nitrogen production plant. The United States is a net importer of ammonia. Since 1990, U.S. ammonia demand has exceeded U.S. supplies while nitrogen plants have been producing in excess of 100 percent capacity. These factors have

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Commodity programs can directly influence fertilizer use through planted acreage or application rates. The U.S. Government supported crop prices for over half a century by lending farmers money at varying loan rates, using crops as collateral and guaranteeing minimum crop prices (target prices set by law). When market prices of commodity program crops were lower than target prices, participating farmers could receive from the Government deficiency payments for crops planted to base acreage. Deficiency payments were the difference between the target price and the higher of the loan rate or average market price. Participation in commodity programs provided farmers with a more stable farm economy over time; however, participation also required some land to be idled (CRP and ARP programs). Data from the 1991 and 1992 Cropping Practices Survey were analyzed to determine if economic incentives from participation in commodity programs caused program participants to apply fertilizers at greater rates than nonparticipants (Ribaudo and Shoemaker, 1995). Fertilizer and agricultural chemical use between corn grower program participants and nonparticipants were analyzed. The results of that study suggest that economic conditions created by commodity programs increased fertilizer application rates on corn. Future fertilizer use is uncertain. If farm and trade policy continues to provide farmers with more acreage flexibility and freer market

Potential for Agricultural Use of Municipal Wastes

Many urban areas in the United States have an urgent need for a long-term environmentally safe method for recycling and disposal of municipal wastes. Currently the number of landfills is limited and new landfills that meet EPA standards for protecting the environment are costly. Municipal wastes contain nutrients and organic matter and other soil conditioners that can be used for agriculture which could mitigate urban waste disposal problems and their economic costs. The fertilizer-equivalent value to U.S. farmers of municipal solid wastes (MSW) is about $378 million and sewage sludge (SS) is about $72 million. Nutrients from the wastes could reduce dependence on commercial fertilizer from limited supplies of mineral and energy resources. Wastes are being used in the horticultural industry; greater use in agriculture would contribute to the long-term sustainability of agricultural production.

One promising way to use municipal wastes is through composting, a microbiological process that partially decomposes organic wastes through the growth and activity of bacteria, actinomycete, and fungi that are indigenous to the organic wastes. The process reduces the weight and volume of the waste while abating odors, destroying pathogens, and converting nutrients to more plant available forms.

Issues

Technical, economic, and public perception issues hinder agricultural use of municipal wastes. Research is underway to provide better information. Technical issues to be resolved include: (1) uncertainty about the quality of municipal wastes because of heterogeneity and range in chemical and physical characteristics of wastes; (2) concern about the fate and effects of trace elements, synthetic organics and pathogens in wastes on soils, plants, animals and humans; (3) uncertainty about application methods and levels of waste applied to agricultural or horticultural production systems to minimize damage to the environment, such as the accumulation of non-nutrient heavy metals in soils; and (4) inadequate information on blending, mixing, or co-composting different wastes to produce final products with desirable characteristics for agricultural or horticultural use.

Economic issues include: (1) uncertainty about the fertilizer equivalent and soil-conditioning value of municipal wastes; (2) economic application to land; (3) the extent to which municipalities may need to subsidize waste transportation expenses to make its use economically feasible in agricultural production. Public perception issues include the need to show that agricultural use of municipal wastes is environmentally safe and does not pose a human health risk. Sources: USDA, ERS, based on ARS, 1993; Goldstein and others, 1994; and EPA, 1993.

conditions, fertilizer use could increase as more acres come into production. At the same time, possible declines in commodity prices could reduce the demand for fertilizer.

Increased Nutrient Management

Over 1,400 counties contain areas where groundwater
is susceptible to contamination from agricultural
pesticides or fertilizers (National Research Council,
1989). States including California, Florida, Iowa,
Nebraska, New York, and Wisconsin have developed
strategies for dealing with agriculturally induced
groundwater contamination. Contamination is
prevalent in areas with sandy soils, which are highly
porous. In some of these areas, restrictions have been
placed on fall applications of nitrogen-based
fertilizers. Applications are restricted either under
certain weather conditions or during certain time.
periods. In ammonium form, nitrogen is fairly
immobile in soil. Under most conditions, however,
ammonium is converted biologically to nitrate, which

readily moves with the soil water. Nitrate that is applied in the fall when no crop is planted or when plant uptake is minimal has greater potential of moving with the soil water from the soil to groundwater, streams, and impoundments. Otherwise, it denitrifies and passes to the atmosphere as gas. Effective timing of split fertilizer application during the crop-growing season and the use of nitrification inhibitors can reduce nitrate leaching and denitrification and improve crop nutrient uptake. Efforts to improve nitrogen efficiency will require better synchronization between soil nitrogen availability and crop nitrogen requirements.

A wide variety of nitrogen fertilizer formulations are available to producers to accommodate various times, rates, and methods of application. Additional nitrogen management may be required to minimize contamination of groundwater. Management systems that hold promise include the use of satellite imagery or Global Positioning Systems and grid farming,

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Recent ERS Reports on Nutrient Issues

1995 Nutrient Use and Practices on Major Field Crops, AREI Update, May 1996, No. 2 (Harold Taylor). Total nutrient use was 5 percent lower in 1995 than in 1994 with nitrogen use down 7 percent and phosphate and potash use down about 2 percent each. The major factor was decreased corn acreage, which uses 40-45 percent of all fertilizer. Agricultural Input Trade, AREI Update, 1995, No 10. (Stan Daberkow, Mohinder Gill, Harold Taylor, Marlow Vesterby). The United States is a major exporter of phosphate and nitrogen fertilizer products and a major importer of potash. The value of fertilizer exports has varied from $3.0 billion in 1991 to $1.8 billion in 1993. Data are reported by region and country.

Pesticide and Fertilizer Use and Trends in U.S. Agriculture, AER-717, May 1995 (Biing-Hwan Lin, Merritt Padgitt, Len Bull, Herman Delvo, David Shank, and Harold Taylor). Pesticides and fertilizer contribute to increased productivity in agriculture, but their use is also associated with potential human health, wildlife, and environmental risks. Nitrogen, phosphate, and potash all shared in the dramatic increase in fertilizer use, but the relative use of nitrogen increased much more rapidly from 37 percent of total nutrient use in 1960 to more than 50 percent since 1981. Chemical Use Practices, RTD Update, July 1994, No. 2 (Harold Taylor, Biing-Hwan Lin, and Herman Delvo). Chemical application timing and methods varied considerably among the major field crops. Fertilizer was more frequently applied before planting to corn, soybeans, and winter wheat, at planting to durum and spring wheat, and after planting to cotton and fall potatoes. Herbicides were most frequently applied after planting to most crops except upland cotton. Area and State-level data are for corn; upland cotton; fall potatoes; soybeans; and winter, spring, and durum wheat.

Fertilizer Use and Price Statistics, SB-893, Sept. 1994 (Harold Taylor). The rapid growth in fertilizer consumption throughout the 1960's and 1970's peaked at 23.7 million nutrient tons in 1981. Use remained relatively stable, ranging from 19.1 to 21.8 million tons during 1984-93. Fertilizer prices vary by product and year, but the fertilizer price index was less during the late 1980's and early 1990's than in 1982. Area and State data are for corn, cotton, soybeans, and wheat from 1964-1993, and total U.S. consumption data are from 1960 to 1993.

(Contact to obtain reports: Harold Taylor, (202) 219-0476 [htaylor@econ.ag.gov])

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