Thanks for the reply. I thought about that issue and in the script I checked the user id I am executing as and it is root. In root's home directory I have the .ssh/known_hosts file with the key in it. If I remove the key and execute the sftp from the command line it detects there is no current key and prompts if I want to add it. I reply with yes and it adds the key. I will try adding the /etc/ssh/known_hosts to see if that helps.