An Examination of Factors Influencing Fertilizer Price Adjustment

This paper utilizes an error correction model to examine how anhydrous ammonia (AA) and urea prices at different locations in North America adjusted to changes in crop and input prices during two time periods: 2002 to 2005 and 2006 to 2009. The empirical results suggest that natural gas futures prices had relatively more of an impact on nitrogen fertilizer prices during the 2002-2005 period. Nitrogen prices tended to adjust more rapidly to increases in natural gas futures prices than decreases. In the 2006 to 2009 period, corn futures prices had more of an impact on nitrogen prices. Nitrogen prices tended to respond immediately to decreases in corn futures prices. The nitrogen price responses to increasing corn futures prices were mixed.

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 Record created 2017-04-01, last modified 2019-08-26

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