Fertilizer costs rocket with food prices: Rabobank

NEW YORK (Reuters) - Fertilizer costs are rocketing along with higher food prices as fast growing nations like China and India try to boost crop output, Rabobank, a lender to the agricultural sector, said on Tuesday.

"We have seen the cost of fertilizer double and triple for some of our U.S. farmers and it's really straining their balance sheets," said Erin FitzPatrick, analyst at Rabobank's Food & Agribusiness Research and Advisory section.

"Much of this increase in cost is because supply cannot keep up with demand," she said in a podcast posted on Rabobank's Web site www.RabobankAmerica.com/Rabocast.

Fitzpatrick said some components for fertilizer, such as nitrogen, which is heavily reliant on natural gas, had become more expensive, and minerals like phosphorous and potash which are added to the mix took long to produce.

"Countries such as China and India are increasingly using more fertilizer and the supplies coming on line to meet this demand just have not grown at the same pace," she said.

While corn, soybean and wheat farmers have seen prices for their crops rise this year to alleviate some of the higher production costs, growers of smaller produce like fruits and vegetables have had little relief, FitzPatrick said.

She said both users and producers of fertilizer were trying to step up efficiency.

"Producers are increasing capacity, expanding mines and moving closer to sources of natural gas. Farmers, on the other hand, won't stop using fertilizers because all the nutrients they contain are needed for crop life. But, they will make adjustments," she said, adding that these included better soil tests and re-evaluation of crop rotations.

(Editing by David Gregorio)