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ITRO News AXcess News: Strong Demand for Biofuel Lifting Corn Prices and the Cost to Grow It

HOUSTON--(BUSINESS WIRE)--Corn prices have been steady near the $3 level on the Chicago Board of Trade, thanks in part to a growing demand for biofuel, and while that may mean more income for farmers, the cost of fuel and fertilizer is weighing in against any market gains.

December corn closed at $2.89 1/2 on Monday, up a whopping 18 1/2 cents on the day, but retraced Tuesday back to $2.75 1/2. Of the 2007 contracts, December held the highest close Tuesday at $3.06 1/2.

Purdue University agricultural economist Chris Hurt said the corn price premiums are sufficient to cause farmers to plant corn on ground that had been in corn the previous year. "We are assuming 10% lower yields and about 10% higher costs to put the crop out," under those circumstances, Hurt said. "In other words, I believe the market is giving more than enough incentive to get the corn acres needed for next year."

With higher costs, farmers are looking to alternative fertilizers, especially with the growing environmental movement to curb the use of chemical nitrates and phosphates.

In Missouri, an agronomy professor at Southeast Missouri State University is studying the use of chicken litter on Missouri crops as an alternative fertilizer. Professor Michael Aide is in the first year of studying its use on crops.

"There's renewed interest in using it because of the current economic situation and cost of nitrogen fertilizer," said Aide. To compare with those plots, "we have synthetic nitrogen as well as phosphate in all possible combinations."

But Aide says that, "Over a long time, phosphorus can build up to toxic levels."

Reno-based Itronics, Inc. (OTCBB: ITRO) already passed the lengthy field test period for its GOLD'n GRO liquid fertilizer made from recycled photochemicals for some crops, which this year included silage corn, cotton and other crops. Tuesday, the enviro-ag company preliminarily reported a 37% increase in fertilizer sales in the first nine months and a 28% increase in the third-quarter.

Itronics President Dr. John Whitney attributed the rise in fertilizer sales to "positive results obtained in field trials on silage corn, and from use in bulk blends applied in citrus fertigation this year." Most of Itronics' years of field trials and sales have been concentrated in the California market. But over the last year, Itronics has been applying to get its products approved in more states.

While alternative fertilizer test programs are going on across the country, smaller niche operators like Itronics are slowly making headway in expanding their markets. With silage corn new on Itronics' list of crop applications for its GOLD'n GRO fertilizer, the company is apt to see more farmers turn to its use in curbing costs next year.

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