If you live in rural America, chances are you don’t use much natural gas. Generally, suppliers deliver natural gas via pipeline to homes and businesses in urban centers. When you fire up your furnace this winter, your fuel probably comes from a white tank out back filled with liquid propane (LP), a by-product of both natural gas and oil processing.
But natural gas may affect you more than you realize. For nitrogen fertilizers, “natural gas has the largest impact on production costs—it’s about 70 to 90 percent of the cost,” according to Kathy Mathers of The Fertilizer Institute.
When American grain growers look back on 2008, they will remember strong returns, but also sharply higher prices for inputs such as fertilizer. 2008 also brought high natural gas prices.