Back in February when Russia invaded Ukraine was when I first wrote about the high price of fertilizers this year and the reason why. Ukraine was a major fertilizer manufacturing hub for all of …
Back in February when Russia invaded Ukraine was when I first wrote about the high price of fertilizers this year and the reason why. Ukraine was a major fertilizer manufacturing hub for all of Europe and well as the bread bas- ket for most of western Europe.
I have learned a lot more about the global fertilizer market since then. Back in February if you hap- pened to buy any fertilizer companies stock, you would see currently between a 25 to 30 percent gain in just eight months.
Nitrogen is one of the building blocks of life and has been in high demand this year and as a result, profits for North American fertilizer companies have ex- ploded. As anyone who lives by a farm can attest, the main form of nitrogen fertilizer is manure; cow, horse, chicken, duck or pig. Plants need many elements to thrive, and none is more important than nitrogen, which forms proteins, and thus tissue, for all living things.
Air is mostly nitrogen, but farming depends on more reactive nitrogen compounds, like am- monia, made from nitrogen and hydrogen. And if we relied just on manure for fertilizer, the planet would only be able to support a population of around four billion people.
On November 15 of this year, we’re projected to hit eight billion people worldwide. The extra four billion people owe their existence to a German chemist named Fritz Haber who spent World War I de- veloping a process for making ammonia from air, using hydrogen gas, pressure, and a catalyst. The Haber process converts atmospheric nitrogen (N2) to am- monia (NH3) by a reaction with hydrogen (H2) using a metal catalyst under high temperatures and pressures. Haber was awarded the 1918 Nobel Prize in Chemistry for this work.
Today, it’s estimated that half of the nitrogen atoms in the human body once passed through a chemical plant using the Haber process. I guess that also means the other half just came from manure.
The world turns out more than 170 million metric tons of ammonia per year, mostly by using natural gas for the hydrogen source. Now with Europe’s sup- port for Ukraine, Russia has shut off Europe’s natural-gas supply, and since gas isn’t easily shipped overseas, the price in Europe is many times the U.S. price. Gas makes up about three-quarters of the cost of fertilizer, so European plants have simply shut down, leaving North American ones to supply the market and fertilizer is a lot easier to ship than gas.
Meanwhile, the war in Ukraine has also cut into grain production there, raising prices for corn and other crops. Farmers elsewhere are scrambling to raise output, which means they will need more fertilizer. And the natural-gas disruption in Europe appears un- likely to end anytime soon. This problem will not be fixed by next year.
Fertilizer prices will remain high for years to come and will effect the price of every crop they are used on.
Maybe next year we’ll all be smelling the manure spreaders throughout the county.
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