174. ARE HIGH FERTILIZER PRICES A THREAT TO THE FOOD SUPPLY?
Nitrogen fertilizer is made from natural gas (NG), and recently we've been hearing a lot about how high NG prices are putting the crunch on US farmers. For example (as we saw in #112) the fertilizer lobby is teaming up with the oil industry to push drilling in ANWR, Lease Area 181 and the OCS (Outer Continental Shelf). The industry PR tugs at your heart strings: "U.S. farmers provide a safe and abundant food supply for the entire world." Apparently, American agriculture is feeding the world like UNICEF and Bob Geldof. We're also being pelted with a steady stream of media sob stories about Joe the patriotic farmer, withering under the high nitrogen prices while he toils out on the back 40. For the peak oiler, this is how the die-off begins. Food is oil, and food shortages begin to occur as the price of fossil fuel inputs rises.
But is fertilizer in the U.S. really about food?
Here's some interesting figures on total fertilizer consumption (by crop) in the U.S.:
Soy beans: 6%
Tobacco: 0.5% Source
That's most of U.S. fertilizer use (54%) right there. Now -- being as it's thanksgiving and all -- what would you say if you went to your relatives' house for the holiday dinner, and they were serving corn, soy beans, cotton, sorghum and tobacco? How much of that stuff do you actually eat? Not much, I suspect.
For comparison, the U.S. uses 13% of its total fertilizer for wheat, and only 4.5% of its fertilizer for all fruits and vegetables combined.
In other words, the fertilizer "crisis" is about $$MONEY$$, not food. The expense accounts of the fertilizer lobby aren't being paid by farmer Joe back in the Ozarks. The fertilizer lobby is being paid by Cargill, and operations growing ethanol corn for government subsidies. The threat to the food supply is just lobbyist spin. In reality, the NG crunch is primarily a threat to profit margins.
-- by JD