Anhydrous Ammonia, Corn, and Natural Gas Prices Over Time

Nitrogen fertilizer is a major input in corn production and anhydrous ammonia is a widely used nitrogen fertilizer. In recent years, questions exist whether ammonia prices have decreased enough to reflect the decreases in corn and natural gas prices. Over time, anhydrous ammonia prices and corn prices are positively correlated. A major input in ammonia production is natural gas. As a result, natural gas prices also are positively correlated with anhydrous ammonia prices. From 2014 to 2016, anhydrous ammonia prices appear high relative to historical relationships between ammonia, corn, and natural gas prices.