The new fertilizer report is here!

Potash production predictions -- could agricultural economics get any more exciting?

Published February 27, 2008 11:25PM (EST)

Back when this blog began, I would not have predicted that one day, while roaming the Web, I would have felt my adrenaline spike after happening upon a link to a report from the U.N.'s Food and Agriculture Organization titled "Current world fertilizer trends and outlook to 2011/12" Oooh. Fertilizer news! Sexy!

But it's true, I just can't get enough potash and phosphate, not to mention nitrogen. Synthetic fertilizer fits into multiple overlapping narratives -- global energy use, food production, population growth, economic development, environmental devastation.... I'm just sad we're not hearing more about synthetic fertilizer during the presidential campaign, because I'd love to see Barack Obama and Hillary Clinton start attacking each other's fertilizer platform.

The theme of the FAO's report is that, although current fertilizer prices are spiking, production over the next five years will outstrip demand, so there's no need to start worrying about "peak fertilizer," at least within that time frame. But reading between the lines, it's clear that there are some issues to be concerned with.

Fertilizer prices are up because of a demand surge that itself has been propelled by rising food commodity prices, and a consequent rush by farmers to boost production. But here's the intriguing point. In the past, rising food prices have generally been caused by scarcity. That's not true this time around -- globally, harvests of most grains are up, but prices keep rising anyway, because demand is rising even faster.

There's a temptation to blame surging grain and fertilizer prices on the diversion of cropland to biofuels, but that is only true in the case of corn. Overall, bioenergy crops are still only responsible for a small fraction of a global fertilizer consumption. The real driver is the expanding diet of the growing middle class populations of the developing world. Millions of people are eating more meat and fruits and vegetables -- all of which, one way or another, require the application of increased amounts of fertilizer, (in the case of meat, for animal feed).

The good news is that world population growth is slowing -- the FAO says that the rate of population growth decreased from 1.26 percent during 1996-2005 to a projected 1.10 percent between 2006 and 2015. The bad news is that still means another 50 to 70 million people added to the global population every year until the mid-2030s.

Almost all of this increase is expected to take place in developing countries especially the group of 50 least developed countries. More food and fiber will be required to feed and cloth these additional people and to increase the daily food uptake of the still 830 million undernourished worldwide. There is thus significant scope for further increases in demand for food even as population growth slows down.

Who uses the most fertilizer? East Asia, accounting for a whopping 37.2 percent of all fertilizer consumed worldwide. Of note: fertilizer demand in Indonesia and Malaysia is growing especially fast because of the expansion of palm oil production. Palm oil is a popular, cheap, feedstock for biodiesel, which is supposed to be a substitute for petroleum. But the production of synthetic fertilizer requires significant inputs of energy, usually derived from fossil fuels. So in order to produce a replacement for fossil fuels, we must consume more fossil fuels.

Fertilizer. How the World Works will keep you fully up to date.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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