Exhibits I, II, and III present US crop production cost information as reported by USDA's Economic Research Service. As a reminder, the cost information is for production and does not reflect storage, marketing, or any transportation costs involved in the actual selling of the commodity. Soybean production is not as energy intensive as corn. Energy is a major expenditure for farmers, and clearly, any factor that raises the cost of direct energy expenses to the farmer reduces returns per acre. Indirect Usage of Energy Inputs in Production Agriculture Indirect energy use by production agriculture reflects the amount of energy consumed in the production of manufactured inputs required by farmers, primarily fertilizers and pesticides.
Farmers use millions of pounds of pesticides and millions of tons of fertilizers.
Fertilizer production, particularly nitrogen, is energy intensive. Anhydrous ammonia is both a fertilizer and feedstock for production of other nitrogen products. Exhibit IV presents the cost of production for anhydrous ammonia for the 1996-99 calendar years. Every ton of ammonia produced in the US requires between 33 to 34 mmbtu of natural gas. For the past four years, natural gas prices have been stable.