Worldwide pressures on chemical fertilizer supplies have some Iowa farmers falling back on manure for soil nutrients.
American Farmers are using high density Hog Farming to collect hog manure — turning what used to be effuvial runoff into nutrients.
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courtesy of the NYT
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Source:
Shortages Threaten Farmers’ Key Tool: Fertilizer
KEITH BRADSHER and ANDREW MARTIN
NYT, April 30, 2008
http://www.nytimes.com/2008/04/30/business/worldbusiness/30fertilizer.html
This keys exactly into the scrap metal trend raised on Tuesday: higher prices cause people of all stripes to consider the economic incentives of recycling and the economic cost of refusing to do so (ie. wasting resources and having to go to the open market and buy replacement resources).
George Washington Carver is a (not the) father of crop rotation as the principal tool to preserve soil fertility. The need to use fertilizer (esp. petroleum derived) is a symptom of poor land use. Our soil is a savings bank started at the end of the last Ice Age. If the principal is managed well, we can grow abundant crops off the interest forever. The use of chemical fertilizer is an object admission that we have drawn the principal down so far that it now requires a yearly artificial injection just to stay afloat.
Aldo Leopold wrote extensively about this in the 1930s.
Cheers.
The use of chemical fertilizer is an object admission that we have drawn the principal down so far that it now requires a yearly artificial injection just to stay afloat.
Huh, no. What it means is today’s genetically engineered crops are designed to produce higher yields when used in conjunction with chemical fertilizers.
The soil is still fertile and can still grow crops without chemical fertilizers, but the yields won’t be as high because the crops are designed to produce maximum yields using chemical fertilizers.
In other words, the nutrient needs of hybrid plants surpass what the soil can naturally provide.
Something stinks. And it ain’t the manure. First, GM foods are not engineered for higher crop yields. In fact, two large studies, one out of Kansas U, have confirmed GM foods yield measurably less. Second, from the numbers I’ve seen fertilizer demand is up about 5% over the last twenty years. Not annually. 5%. Globally. I am very dubious of claims of shortages. Similar to shortages in ries which are really shortages of money to buy rice at substantially elevated prices. Something else stinks. Many financial firms are stockpiling certain commodities to insert themselves into the pricing supply chain for prices and to artificially give the appearance of supply problems to support their trading positions and I wonder if something similar is happening here.
The more I hear about fertilizer shortages, the more I want to short firms like Potash.
Potash has been trading down last few weeks amongst the following headlines:
1) Blowout earnings
2) Raising earnings guidance forever.
3) Intrepid Potash coming public
4) Fertilizer crises
5) Massive coverage of food shortages
Not sure if its THE top in Potash….but I’m a smidge short Potash right now…running a 210 stop.
AT
In a previous life myself and a few friends started an import export trading company. The food commodities were an open field but fertilizer was controller tighter then oil. There were only a few players; even with a 10mil metric ton contract available for the Indian government, the market was closed…
So I see headlines about a world wide “crunch” on fertilizer and laugh because it is probably orchestrated.
Why am I getting the deja vu feeling that I’ve seen this before, as in “ADM and lysine”?
Although the comments above make the article not seem like a true crisis, it does bring up some valid points to debate.
Not to get all Trekie, but as developed nations, we are going to have to face the problem of the Prime Directive. As we watch countries coming into their own, and with it the growing pains that we have already gone through (and somewhat learned from), should we interfere?
I’m not sure that we can walk in and tell the growing middle-classes of these developing countries that, for example, they shouldn’t eat so much meat because of it’s inefficiencies (1 lb of meat = 5 lb of corn). Or that due to our past century of agricultural gains, we know about run-off, and we have the knowledge of ‘dead zones’ but can our knowledge be pressed upon others to take up the environmental changes (and with it, sacrificing of their exponential gains)? Or the limited fossil fuels issue…
We might run into push-back as some would rather learn from their own mistakes, but with globalization, and instant global news/media – I don’t think we can stand by and watch as they pursue the unsustainable.
The only way to avoid this scenario is to lead with innovations that can be immediately exported to developing countries – affordably. If, as some African nations have, developing countries can start with cell phones instead of land-lines or compact fluorescent bulbs instead of incandescent, then we need to step up to the next level with agriculture and energy. What comes next after crop rotation and hog manure?
If there is a shortage, I wonder how much of that is due to our defence budget?
After all, the chief ingridients in fertilizers are essentially those used in munitions. And, boy, have we been using a lot of those lately.
Natural gas is used to produce hydrogen, which is then reacted with nitrogen to produce ammonia, of which most goes towards fertilizer production. So, right now, fertilizer production is intimately linked to natural gas production and price.
I’m pretty confident that, eventually, we’ll be able to produce H2 efficiently from electrolysis of water (without expensive catalysts being needed) so we won’t have to have natural gas as the reactant. But before we have a real push towards hydrogen production, I expect fertilizer to be a major issue worldwide with respect to food supplies.
Weren’t we warned about this in the 70’s?
The prices of fertilizer have sometimes tripled in just 1.5 years?
The article doesn’t really cite high energy cost (nat gas & other) in nitrogen harvesting as the primary factors in the price increase of fertilizer. Instead they hint at supply/demand issues from increased production of corn & wheat.
I bet charts would NOT show direct correlations of the fertilizer price increases minus energy costs with the crop-planting increases in the last few years.
Sounds like the fertilizer producers let the shortage occur, totally disregarding any signs that demand for the product has been slowly mounting.
So if the producers have recognized the shortage and are ramping up, how quickly will prices fall with supply?
GW Carver is what is up. What better instance of a Man committed to growing an Economy, rather than rigging a Schema for maximum flow of fiduciary media, is there?
This Fertilizer addiction is, yet, another, connivance to fuel the Waste that trips the counters of our Financial Pachinko palors.
reference point:
Source: Bloomberg
Fidencio Alvarez abandoned his bean and corn farm in southern Honduras because of the rising cost of seeds, fuel and food. After months of one meal a day, he hiked with his wife and six children to find work in the city.
“We would wake up with empty stomachs and go to bed with empty stomachs,” said Alvarez, 37, who sought help from the Mission Lazarus aid group in Choluteca in January. “We couldn’t afford the seeds to plant food or the bus fare to buy the food.”
Honduran farmers like Alvarez can’t compete in a global marketplace where the costs of fuel and fertilizer soared and rice prices doubled in the past year. The former breadbasket of Central America now imports 83 percent of the rice it consumes — a dependency triggered almost two decades ago when it adopted free-market policies pushed by the World Bank and other lenders.
The country was $3.6 billion in debt in 1990. In return for loans from the World Bank, Honduras became one of dozens of developing nations that abandoned policies designed to protect farmers and citizens from volatile food prices. The U.S. House Financial Services Committee in Washington today explored the causes of the global food crisisand possible solutions.
The committee examined whether policies advocated by the bank and the International Monetary Fund contributed to the situation. Governments from Ghana to the Philippines were pressured to cut protective tariffs and farm supports and to grow more high-value crops for export, reports by the Washington-based World Bank show…
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=aGxiawAqP0.w
Here is an interesting opinion piece on how the high price of oil reverses the competitive advantage of large-scale farming over small and medium sized farms. The writer sees this as a plus for food quality.
“Change We Can Stomach”
http://www.nytimes.com/2008/05/11/opinion/11barber.html