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Fertilizer 101: Who, What, How Much and Charts!

10/31/2015

 
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Have a beef with the fertilizer industry? Love em' or hate em', we've got some information for you. We're going over industry leaders, product efficiency, usage, price trends, and charts! If you want a bunch of fertilizer fun facts for tonight's dinner table conversation, read on. And just in case you were wondering what this week's article picture is, the orange part of the rock is potash.
There's lots of talk out there about farming ethics. From issues like soil erosion to chemicals in our food, awareness is certainly growing. Specifically, private estimates show some parts of Iowa's soil blowing away at rates more than 12 times the USDA estimates. Is the potential of additional fertilizer usage real? Absolutely, at least in theory. But for now, we'll focus on the current situation regarding fertilizer.

​Today, the public questions everything. Fertilizer companies haven't received nearly as much attention as pesticide and seed companies, especially on Netflix.  Numbers of documentaries summarizing their questionable practices pop up each month. But who knows? Maybe fertilizer companies are next. You sure can't tell by their stock prices (aside from their stock splits).
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​Instead of stock prices, let's check on the products. According to the data, the U.S. farmer would be in an entirely different place without fertilizer. The chart below tells the story pretty clearly. Even if this data is biased (from the USDA, who's supported by the same companies it reports effect), you cannot deny the fact that science has played a tremendous role in increasing production. So how much fertilizer does it really take?
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The Fertilizer Institute says it now takes 1.5 to 2 pounds of fertilizer nutrients to produce a bushel of corn and 1.0 to 1.5 pounds for soybeans. Fortunately for farmers and consumers alike, usage has been somewhat consistent over the past 20 years. My first thought when I saw the chart below was, given that product efficiency can't increase forever, what are the implications for price? This question lead me to fertilizer price bench marking.
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 And to my surprise, this Green Markets chart (below) shows national fertilizer prices have fallen in half relative to their 2008 and 2012 highs. Green Markets is a Kennedy Information company, owned by Bloomberg, and serve as the industry leader in fertilizer price bench marking. They use mainly Gulf Coast Urea, U.S. Cornbelt Potash, and NOLA Barge DAP (diammonium phosphate) to arrive at their estimated price. 
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For now, farmers are in a better place financially because of fertilizer. Its efficiency is at all-time highs, while usage and prices have curtailed. As some of our other articles tout, raining in on decisions worth spending time on is the farmer's dilemma. We hope this article helps to lessen your dilemmas.

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