Advances In Fertilizer Technology Can Help Feed The World

by: Jeff Williams

Looking out toward the year 2030, the world's population will increase from 6 billion today to approximately 8.3 billion. Looking out toward 2050, the world's population is estimated at 9.1 billion, an increase of 50% over today.

One of the many questions we're facing for the future is: How are we going to grow enough food to feed the increase in population?

It is estimated that by 2050, farmers are going to have to double food production to keep up with the demands of a growing population. In his article "Farmers Can Feed The World," Professor Borlaug of Texas A&M University states:

Factor in growing prosperity and nearly three billion new mouths by 2050, and you quickly see how the crudest calculations suggest that within the next four decades the world's farmers will have to double production.

With a finite land supply to feed the world, companies that are focused on research and development are going to have to come up with more ways to help farmers make more effective use of their land supply.

Professor Borlaug also states:

Given the right tools, farmers have shown an uncanny ability to feed themselves and others, and to ignite the economic engine that will reverse the cycle of chronic poverty.

As there are many political, social and economic interferences with regard to the distribution of food, one of the ways farmers can make their land more efficient in their regions is through the use of fertilizers.

Scientific research and development led by companies like Potash Corp. (NYSE:POT), Agrium (NYSE:AGU) and Mosiac (NYSE:MOS) -- which are leaders in the fertilizer industry -- and other leadership companies, such as Intrepid Potash Inc. (NYSE:IPI) and CF Industries (NYSE:CF), are providing farmers with today's most effective fertilizers to help create the best use of their land. According to 49 North Resources' (OTC:FNINF) website, "Fertilizer is vital because it allows farmers to produce more crops on less land. Without fertilizer, we would need at least 40% more farmland."

In its efforts to provide customers with the most advanced fertilizers available, Potash Corp. has a company-wide initiative to continuously upgrade its facilities. Potash recently reported improvements to the Cincinnati facility, as outlined by the company's spring 2012 Under Field report: "These recent improvements all add up to a lab that makes the Cincinnati facility and Potash Corp. more efficient, more sustainable and better able to meet the needs of its customers."

Currently, Potash is developing its Brownfield mines to increase overall productivity to feed a growing need for fertilizers. The company is working on expansion projects at its six existing mines and facilities
in Cory, SK; Allan, SK; Lanigan, SK; Patience Lake, SK; Sussex, NB; and Rocanville, SK. The expansion projects will grow Potash's ability to produce more fertilizers. Wayne Brownlee, Potash's executive vice president and CFO states, "Based on our brownfield development abilities, we believe Potash Corp. will lay claim to approximately half of all new operational capability in the next four years, giving it the greatest volume growth potential in the industry." (Taken from Under Field Reports -- Spring 2012.)

Like Potash, Agruim also has an initiative to build on its scientific and production upgrades. In December of 2011, Agrium announced a long-planned $1.5 billion project to expand its potash production capacity by about 50%. The expansion is aimed at capitalizing on the growing demand for crop nutrients. In an article titled "Agrium's board approves substantial potash expansion," Agrium states:

The expansion is expected to increase annual production capacity by approximately 50%, bringing total annual nameplate capacity to three million tonnes. Capital expenditure for the project is expected to be approximately $1,500 per tonne. The majority of the project construction is expected to take place in 2012 and 2013, with completion projected by the second half of 2014.

Today's announcement is a great step forward in the execution of Agrium's strategic objectives, helping to meet an ever growing global demand for potash, while providing significant economic benefits to the people of Saskatchewan.

In addition to expanding its production base, Agrium has been working on improving its fertilizer products. Products such as ESN Controlled-Release environmentally-smart nitrogen fertilizer and Ultra Yield micronutrients from Agrium Advanced Technologies are proving to be very beneficial on increasing yields for many major crops, including corn, wheat, potatoes and forage crops.

Also moving forward in fertilizer technology is Mosaic. In 2008, Mosaic built the Mosaic Fertilizer Technology Research Centre. Located at the University of Adelaide's Waite Campus, the research center is designed to bring together world-leading scientists. According to the Mosaic Fertilizer Technology Research Centre website, "The center has expertise in soil chemistry, fertilizer technology and plant nutrition. Specifically, in developing novel fertilizer formulations, advanced isotopic and spectroscopic investigations of fertilizer efficiency, and field scale agronomy trials."

Based on Mosiac's advances in research, the company has created its MicroEssentials product. The MicroEssentials article states:

What makes a better fertilizer? Typically, fertilizer is made up of a mix of nutrients, such as nitrogen, phosphorus, sulfur and zinc. But as anyone who has ever baked a cake knows, simply stirring those ingredients doesn't guarantee that they'll be distributed evenly. One part of a field, for example, could get a heavy dose of a nutrient while another part gets none. To address this problem, Mosaic developed MicroEssentials, which Farm Industry News named the most innovative fertilizer product of 2010. MicroEssentials, says McLellan, blends all of the ingredients into one perfectly composed granule, which results in more efficient distribution and creates a greater and higher-quality yield.

Gary Halvorson, general manager of CHS Ag Services, a Minnesota-based fertilizer distributor, says MicroEssentials SZ (one of five formulations that address different types of soil) has produced good responses in corn, sugar beets and spring wheat. In its own corn yield trials, Mosaic says, MicroEssentials produced between 2.7 and 7.7 more bushels per acre than competing fertilizers.

In a recent report issued by the Anhui Haoyuan Chemical Industry Group, it states that "future fertilizer research should be focused on how to improve the efficiency and utilization rate, rather than continue to substantially improve the fertilization level."

As leading fertilizer companies continue their research, they will help farmers make more efficient use of their land. With a growing population, farmers must maximize crop production so that the world will benefit from more food. As continued advances in fertilizers are made, along with an understanding of how crops grow, the efficiency and productivity of farmland will increase, thus creating more food for a growing population.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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