I couldn’t afford to wait any longer. In just the last couple of weeks, the price of fertilizer has shot up by about $100 per ton. My costs have tripled in just 12 months. There’s no reason to think they’ll do anything but go higher still. Like fuel and food before it, fertilizer is becoming more and more expensive.
Even the New York Times has caught on, and in an article last month reported that world-wide improvements in nutrition are “threatened in many countries by spot shortages and soaring prices for fertilizer, the most essential ingredient of modern agriculture.”
We can’t live without fertilizer. I mean that literally. If farmers didn’t fertilize their crops, the world would have 40 percent less food, according to Vaclav Smil of the University of Manitoba.
It would have a lot less people, too.
Before you start thinking about how nice it would be to have a little extra elbow room, ponder this question: In an unfertilized world, who says that you wouldn’t be among the unfed or the missing?
Fertilizers are like vitamin supplements for plants. They essentially make a plant’s diet more nutritious, allowing it to grow bigger and stronger. Just as parents want their kids to eat a balanced diet, farmers want their crops to get what they need to thrive.
The major nutrients in fertilizer are nitrogen, phosphorous, and potassium–elements that occur naturally in our environment. Crops utilize the nutrients, growing healthier, faster and with much greater yield – which is why fertilizer must be reapplied each year.
With all of our costs of living going up, we need to squeeze more production out of our existing farmland. The best way is to harness the powers of nature and nurture. We should strive to improve the quality of our seeds, especially through biotechnology. That’s nature. Then we should make sure the seeds get everything they need to become fruitful crops, especially with the right mixes of fertilizer. That’s nurture.
Norman Borlaug put it well: “Improved seeds are the catalyst that ignited the Green Revolution and mineral fertilizer is the fuel that powers it.”
Since 1996, worldwide demand for fertilizer has risen by 31 percent, according to the International Fertilizer Industry Association. In developing countries, consumption of fertilizer is up 56 percent. For them, fertilizer is often the difference between subsistence agriculture and running a farm that also has products to sell.
Free trade is an ally in the effort to keep down the cost of fertilizer. By allowing the market to match willing buyers and sellers, both producers and consumers will receive price signals that give them important information. Producers will build their own capacities. Consumers will do what I just did: Place their orders earlier than normal.
Unfortunately, some governments are trying to throw a monkey wrench in the mechanics of free trade. China, for instance, is a large producer of nitrogen and phosphorous. Last month, it slapped a big export tariff on these ingredients, in an effort to ensure domestic supplies at artificially low prices.
Price controls almost always backfire, and China may come to regret its decision if its own crop production begins to sag. Whatever the consequences for the Chinese, these new tariffs will have a bad result for Americans and just about everyone else because they’ll push up the world price of fertilizer – including mine.
Natural gas is an essential component in the production of nitrogen fertilizer, and accounts for anywhere from 50 to 90 percent of the cost of production. The cost of natural gas in the United States has more than tripled since 1999, resulting in significantly less fertilizer production here. Because of this, American farmers are left to depend on international supplies, leaving us vulnerable to price manipulators and others who are not free market players.
The United States would be in a better position to confront this challenge if we had more sensible policies. Access to fertilizer should be a key component of a comprehensive energy plan.
Although increasing the domestic production of natural gas won’t satisfy all of our needs, additional drilling for oil and gas here at home would improve our circumstances. Today, much of our domestic oil and gas supply is unavailable due to executive and congressional blocking of commercial development. The ability to access affordable natural gas impacts our fertilizer supply and ultimately, world food security.
Maybe somebody should fertilize the minds of our federal lawmakers.
Tim Burrack raises corn and soybeans in partnership with his brother on their NE Iowa family farm. Tim is a Board Member of Truth About Trade and Technology