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Friday, November 25, 2005

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.:
Corn: 41%
Soy beans: 6%
Cotton: 5%
Sorghum: 1.5%
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

26 Comments:

At Friday, November 25, 2005 at 2:38:00 AM PST, Anonymous Anonymous said...

Intresting piece, although the point that you miss i think. Is that the corn is grown to feed your thanksgiving turkey, aswell as all those cattle that roam the mid west.

 
At Friday, November 25, 2005 at 4:03:00 AM PST, Blogger Roland said...

the corn is grown to feed your thanksgiving turkey, aswell as all those cattle that roam the mid west.

Oh well, we'll all have to eat less meat. No harm in that, since grazing is very environmentally destructive anyway. (Has anyone seen the crazed meat-addict in in the Morgan Spurlock TV show 30 Days running around the ecovillage trying to shoot rabbits? Scary.) I suppose the answer is Quorn (#92).

Anyway, great post JD. The figure about only 4.5% of fertilizer being used for fruit and veg was particularly interesting. I would like to know how much NG is used to make fertilizer, so as to figure out the percentage of NG which actually goes onto fruit and vegetables.

 
At Friday, November 25, 2005 at 6:25:00 AM PST, Anonymous richard said...

A quick drive through the country side tells you this also: Corn, corn & corn. And more corn. So when we will have a problem with NG, it will be corn to go first.

The other thing is that it is very costly to transport NG and it takes a lot of energy to do so. And NG has peaked already in N.A. But shupping fertilizer is quit simple.

So if you look from that perspective: We will have fertilizer long after the heating has gone out ;-)

 
At Friday, November 25, 2005 at 10:43:00 AM PST, Anonymous Anonymous said...

Seems a bit of a simplification. If no one actually needs the fertilizers, why are they used at all? Are the fertilizers going to keep the lawn of the White House Green? When you ask if we are digging into sorghum dishes, I think it is also misleading because sorghum consumers only 1.5 of fertilizers.

Another issue not addressed by this sloppy use of data is the requirement per calorie, and of course the importance of important crops, and the use of fertilizers in those countries.

I am sure that you are aware thet increases in fertilzer costs will affect not only the US, but also "the rest of the world", including farmers without greenbacks to buy the nitrogen. I would suspect that an increase in costs for the average rice farmer in China/India/etc is a big deal, especially since hundreds of millions of people are dependent on those crops (not sorghum).

I think this "analysis" drastically simplifies a complex and multifaceted issue.

Of course you are right, it is all about money, but eventually the costs _will_ be passed on to the consumer, regardless of who is greedy.

 
At Friday, November 25, 2005 at 12:05:00 PM PST, Anonymous Anonymous said...

From Richard Heinberg's Museletter
http://museletter.com/archive/159.html


"Topsoil: The world's existing soils were generated over thousands and millions of years at a rate averaging an inch per 500 years. The amount of soil available to farmers is now decreasing at an alarming rate, due mostly to wind and water erosion. In the US Great Plains, roughly half the quantity in place at the beginning of the last century is now gone. In Australia, after two centuries of European land-use, more than 70 percent of land has become seriously degraded.2 Erosion is largely a function of tillage, which fractures and loosens soil; thus, as the introduction of fuel-fed tractors has increased the ease of tillage, the rate of soil loss has increased dramatically.....

Grain production per capita: A total of 2,029 million tons of grain were produced globally in 2004; this was a record in absolute numbers. But for the past two decades population has grown faster than grain production, so there is actually less available on a per-head basis. In addition, grain stocks are being drawn down: According to Lester Brown of the Earth Policy Institute, "in each of the last four . . . years production fell short of consumption. The shortfalls of nearly 100 million tons in 2002 and again in 2003 were the largest on record."3 This trend suggests that the strategy of boosting food production by the use of fossil fuels is already yielding diminishing returns.....

.....given the fact that fossil fuels are non-renewable, it will be increasingly difficult to continue to supply chemical fertilizers in present quantities. Nitrogen can be synthesized using hydrogen produced from the electrolysis of water, with solar or wind power as a source of electricity. But currently no ammonia is being commercially produced this way because of the uncompetitive cost of doing so. To introduce and scale up the process will require many years and considerable investment capital.....

The problems associated with the modern global food system are widely apparent, there is widespread concern over the sustainability of the enterprise, and there is growing debate over the question of how to avoid an agricultural Armageddon. Within this debate two viewpoints have clearly emerged.

The first advises further intensification of industrial food production, primarily via the genetic engineering of new crop and animal varieties. The second advocates ecological agriculture in its various forms - including organic, biodynamic, Permaculture, and Biointensive methods.....

The transition to a non-fossil-fuel food system will take time. And it must be emphasized that we are discussing a systemic transformation - we cannot just remove oil in the forms of agrochemicals from the current food system and assume that it will go on more or less as it is. Every aspect of the process by which we feed ourselves must be redesigned. And, given the likelihood that global oil peak will occur soon, this transition must occur at a rapid pace, backed by the full resources of national governments."

 
At Friday, November 25, 2005 at 12:07:00 PM PST, Anonymous Anonymous said...

JD,

Time for you to get a clue.From PeakOil.com

Have you read these articles?:

http://www.agriculture.com/ag/story.jhtml?storyid=/templatedata/ag/story/data/1130343281366.xml

Excerpt:
"The U.S. fertilizer industry is suffering "ongoing damage" from a crisis in natural gas production, a representative of the The Fertilizer Institute (TFI) told a Congressional committee this week.

"The current U.S. natural gas crisis is exacting a heavy toll on America's nitrogen fertilizer producers and the farmer customers they supply," said TFI President Ford B. West. "The resulting negative financial impact on the North American fertilizer industry is unprecedented and threatens to irreversibly cripple the U.S. nitrogen fertilizer manufacturing industry, which supplies approximately one-half of U.S. farmers' nitrogen fertilizer needs."

West told the committee members that in recent weeks three of the largest remaining U.S. nitrogen fertilizer producers have announced production capacity reductions of 50 percent or more."

http://news.minnesota.publicradio.org/features/200101/24_horwichj_farmenergy-m/


Excerpt:
" Heating bills are not the only place Minnesotans will feel this winter's soaring natural gas prices. Expensive natural gas means expensive fertilizer and an uncertain spring for the region's farmers.
THERE'S NOT MUCH FARMING TO BE DONE IN JANUARY, so John Wojtanowicz brings his mammoth potato picker in for a tune-up. Before the picker sees any action this spring, his 1,200 acres of potatoes will need hundreds of pounds of nitrogen. The same goes for his 2,000 acres of corn and kidney beans, hungry for anhydrous ammonia and urea - two popular fertilizers made by mixing raw nitrogen with natural gas.

Soaring natural gas prices have pushed fertilizer prices to double what they were a year ago. Wojtanowicz guesses his cost per acre of potatoes will go up $35. But that's a rough guess in a wild market like this one and, like many farmers, he's bought less than half of the fertilizer he'll need this spring.

A little more manure from a neighbor, and some creative crop rotation might help cut down on fertilizer need, but like many cash crop farmers, Wojtanowicz admits he's dependent on fertilizer.

"We only use what is the optimum amount anyway, and decreasing our usage of nitrogen would just get us lesser crop, and so we wouldn't do that," Wojtanowicz says. "Any farmer that is reasonably successful is already being as efficient as he can and the only thing we can do is try to be more efficient to make up for this. But there is not much wiggle room."

Farmers are used to laughing off tough situations. But nationwide, nitrogen fertilizer plants are producing at only half their full capacity. Last year's hot summer and a shortage of new gas wells have made farmers just one of many groups clamoring for limited supplies."

 
At Friday, November 25, 2005 at 3:34:00 PM PST, Anonymous Anonymous said...

Simplification to be sure, but JD has a good point though. Corn seems to be sucking up ridiculous amounts of N fertilizer... What proportion of that crop goes to making syrup for soft drink and sweeties? Gas scarcity will be great for American waistlines!

Think about it, current farming is BIG BUSINESS, their only concern is BIG PROFIT! That is why farming in America is 'un-sustainable', it is trapped into a system of depleting topsoil etc. We need an agricultural system in crisis because it is the only way it will change.

 
At Friday, November 25, 2005 at 5:24:00 PM PST, Blogger Roland said...

From the Heinberg article:

In 1909, two German chemists named Fritz Haber and Carl Bosch invented a process to synthesize ammonia from atmospheric nitrogen and the hydrogen in fossil fuels. The process initially used coal as a feedstock, though later it was adapted to use natural gas.

That's the only time Heinberg mentions coal. He doesn't talk about simply switching back to coal as a feedstock. What am I missing?

 
At Friday, November 25, 2005 at 5:48:00 PM PST, Anonymous Anonymous said...

Roland wrote:

"What am I missing?"

Answer: some common sense, for starters.

 
At Friday, November 25, 2005 at 8:12:00 PM PST, Blogger James said...

Anon:

Answer: some common sense, for starters


Explain.

 
At Saturday, November 26, 2005 at 2:00:00 AM PST, Blogger Roland said...

Answer: some common sense, for starters.

Actually, common sense says this: We are going to run out of natural gas for fertilizer. Coal was the original feedstock for fertilizer, and we have lots of it. Hence, we should switch back to coal. (And eat less meat, and smoke fewer cigarettes)

 
At Saturday, November 26, 2005 at 4:59:00 AM PST, Anonymous Anonymous said...

Don't you remember Roland? We don't have enough oil to switch from NG to coal. Or, coal can no longer be transported on rivers because the infrastructure needs 90 trillion dollars of investment, which we won't have in the coming global economic depression. And what about peak coal, anyway? You are such a naive optimist. Go back to peakoil.com. Waiting for armageddon is so much more exciting an suggesting such bland practical solutions.

 
At Saturday, November 26, 2005 at 11:21:00 AM PST, Anonymous Wildwell said...

This is interesting

THE build up and release of reactive nitrogen into the environment is seen as the next big pollution problem, according to scientists at Warwick Horticulture Research International.

They say that excessive release of nitrogen is potentially more damaging on a global scale than carbon dioxide, and point to eutrophication - or excessive nutrient enrichment - of watercourses by nitrates as a warning signal.

Agriculture is pin-pointed as the source of the greatest "leakage" of nitrogen to the environment, according to the report Nitrogen UK just issued by HRI.

On a global scale, the report says that increasing demand for food has led to demand for nitrogen fertiliser rising from 1.3 million tonnes in 1930-1 to 82.3 million tonnes in 1998-9.

"This large amount of fertiliser, combined with a crop assimilation rate of 50 per cent means the amount of reactive nitrogen being released into our biosphere has resulted in the natural nitrogen cycle being overloaded," it says.

In the UK alone, over one million tonnes of reactive nitrogen is described as wasted, or returned to the environment with no benefit being realised, out of a total of 3.4 million tonnes either created or produced.

"This loss is not, of course, deliberate but is a result of unavoidable inefficiencies in agriculture, electricity production and road transport."

In Britain, the use of nitrogen fertiliser has fallen from 1.5 million tonnes in 1990 to 1.3 million tonnes in 1999. This trend is mirrored in other developed countries although global consumption rose by 7 per cent.

http://business.scotsman.com/index.cfm?id=2305642005

 
At Saturday, November 26, 2005 at 3:29:00 PM PST, Anonymous Anonymous said...

Thus showing how great Peak Oil will be, as it prevents us from killing Mother Earth.

[/sarcasm]

 
At Saturday, November 26, 2005 at 4:57:00 PM PST, Anonymous Rembrandt said...

It is a little bit too simple too say that corn = the largest part of fertlizer thus that means that we don't really have a problem since corn isn't a basic substance of our diet. Corn is being used for a wide variety of usage in the economy, therefore corn is important to maintain the status of the American Economy. When corn production goes down, so does a part of the economy.

Ofcourse it is possible to change the fertilizer input towards a more sustainable way of argiculture. But this takes time. An example is the considerable amount of research that has been done at my University regarding the usage of wasps instead of pesticides to deal with plagues. This has caused a certain decrease in the usage of pesticides in HOlland. And can cause a considerable amount more but culture and society has been lacking in implementing these changes due to such things as people working in fertilizer factories. Our system has become inert in adapting to new technological improvements. This is one of the big problems nowadays.
Some industries can run at least 30 percent more efficient! But due to pension laws, tax laws and other inert laws nothing changes (you cannot fire someone if it cause more inefficiency...)

 
At Saturday, November 26, 2005 at 4:59:00 PM PST, Anonymous Rembrandt said...

(you cannot fire someone if it cause more inefficiency...)

Should be

(you cannot fire someone if it cause more efficiency due to the inert laws in place...)

 
At Saturday, November 26, 2005 at 9:30:00 PM PST, Blogger Roland said...

Don't you remember Roland? We don't have enough oil to switch from NG to coal. Or, coal can no longer be transported on rivers because the infrastructure needs 90 trillion dollars of investment, which we won't have in the coming global economic depression. And what about peak coal, anyway? You are such a naive optimist. Go back to peakoil.com. Waiting for armageddon is so much more exciting an suggesting such bland practical solutions.

LOL. I assume this is a joke.

 
At Saturday, November 26, 2005 at 9:45:00 PM PST, Blogger Roland said...

Corn is being used for a wide variety of usage in the economy, therefore corn is important to maintain the status of the American Economy. When corn production goes down, so does a part of the economy.

The same will probably happen with the car and airline industries, but the important thing is that people will still be fed.

 
At Monday, November 28, 2005 at 7:38:00 AM PST, Anonymous Thomas said...

roland said:

"Don't you remember Roland? We don't have enough oil to switch from NG to coal. Or, coal can no longer be transported on rivers because the infrastructure needs 90 trillion dollars of investment, which we won't have in the coming global economic depression. And what about peak coal, anyway? You are such a naive optimist. Go back to peakoil.com. Waiting for armageddon is so much more exciting an suggesting such bland practical solutions.

LOL. I assume this is a joke."

Whether intentional or not, it is a joke!

How does nature sustain itself without nitrogen fertilizer?

I'm not a biologist, but here's how I picture it:

Animals eat, primarily to get hydrocarbons to fuel themselves. Secondly, they gain some nutrients. The hydrocarbons come from CO2, water and sunlight, thus not taking anything from the topsoil. Nutrients come from topsoil, but the same amount is crapped back onto the soil, and the circle is complete.

We need to mimic this process. Using animal manure as fertilizer is just a first (smelly!) step.

There are now processes where you can take pig manure, run it through a biochemical process and end up with methane (natural gas), pure water and fertilizer. This resulting fertilizer is odour free and delivers the nitrogen in a way that is much more readily absorbed by plants.

I'm not at all worried about producing enough food, especially in Western countries. As for Africa, they don't need to buy GM crops from American corporations and become further enslaved by our intellectual property. They need to get rid of Mugabe and start cultivating their fields instead of fighting.

-Thomas

 
At Monday, November 28, 2005 at 5:06:00 PM PST, Blogger Quantoken said...

Thomas:

What you don't realize is that the process you propose to mimic is nothing new. It has been practiced in thousands of years! In any agriculture civilization we know, people use animal and human manures as fertilizers. It's being used prior to the invention of chemical fertilizers, and is still being used to supplement chemical fertilizers.

But that model does NOT provide enough food in any quantity to sustain today's population level, as proven by history. For thousands of years the world population stayed at a much lower level than today's, growing only slowly as the usage of manures etc became more widespread.

To illustrate how important fossil fuel based fertilizer industry is to modern food production, you only need to look at North Korea. Why famines and malnutritions are widespread in North Korea?

Putting political factors aside, you need to look at the basic physics. People are hungry because there is not enough food for each person. Why?

It's not because the NK population is too high so per person quality is low.

It is not because Kim Jong-Il eats half of the country's food production, leaving little for his people. A dictator is still a human being and can not eat more than what his stomach can contain.

It is not because Kim shipped most of his country's food production overseas. There is no record NK export any significant amount of food. It's got to be the country simply do not produce enough amount of food period.

So why NK do not produce a fair amount of food? Because it does not have enough arable land? No. Is it because the peasants refuse to work in the fields? No. The peasants will have to work whether they are willing or not. Besides why would the people prefer to choose being lazy and die of hunger, rather than try to work hard and produce food for themselves.

The conclusion is NK do have enough arable lands, and they do have people willing to work in the fields. But they do not produce enough food out of the fields, per acre land wise. Why? What's missing?

The missing component is the fertilizers and fossil fuels. With a broken economy, they can not hope to import significant amount of fertilizers. Without fertilizers, the fields will produce several times less food, regardless how hard you work on the fields. So that's how famine happened.

I will boldly claim that if the US is unfortunately deprived of all the fertilizers we have today, and we are unable to import food, we probably will be as malnuitritioned as the North Koreans!!

 
At Wednesday, November 30, 2005 at 9:08:00 AM PST, Blogger Nick said...

Many farmers are already switching from corn to soybeans because of fertilizer costs.

Fertilizer production in the US is moving to other countries where natural gas is cheap. The fertilizer will be exported to the US. In effect, this is an efficient way of importing gas. Gas is "stranded", meaning that it is difficult to transport long distances, so a shortage in the US exists in parallel with large surpluses elsewhere. Gas will peak worldwide, but not for a while.

Crop substition, imports of fertilizer, more efficient use, and domestic coal mean the US will be fine for many years. Poorer countries may be in serious trouble.

 
At Wednesday, November 30, 2005 at 10:00:00 AM PST, Anonymous Anonymous said...

I have never seen such complete woeful ignorance about the world we live it. Corn is merely a petroleum delivery device that supplies us with virtually all of our calories. Look at a label sometime. What do you suburban morons think. Chicken, cattle, fish for god's sake, now grow up on Purina Chicken Chow, Purina Cattle Chow, Purina Fish Chow for god's sake. What do you think these chows are made from? CORN.

Corn starches, corn sweeteners, corn meals, corn vegetable proteins, corn peanuts for god's sake are all made from petroleum. ARE HIGH FERTILIZER PRICES A THREAT TO THE FOOD SUPPLY? No. Are brains optional?

 
At Thursday, December 1, 2005 at 12:40:00 AM PST, Blogger Roland said...

Many farmers are already switching from corn to soybeans because of fertilizer costs.

The really great thing about soybeans is that the husks can be used to make biodiesel, so you can power all your farming machinery from a byproduct of your crop.

 
At Thursday, December 8, 2005 at 10:12:00 PM PST, Anonymous Anonymous said...

"The really great thing about soybeans is that the husks can be used to make biodiesel, so you can power all your farming machinery from a byproduct of your crop."

husk are cellulosic material. It is virtually impossible to convert husks to energy. To understand this you must understand evolution, but then this is a republican "intelligent design" web site, correct?

Well I'll give it a try. All plant cellulose is designed by nature (or Yawheh or whomever) to withstand predation and UV, O2, etc. It costs more than $100/ton just to break long cellulose chains down for pulp. That is even before hydrolosis and fermentation. $200/barrel is what the petroleum would now cost. What a joke!

 
At Wednesday, December 14, 2005 at 8:05:00 PM PST, Anonymous realjoe said...

I am educating myself in sustainable agriculture and may be developing much of my remaining career to helping evolve sustainable farming methods in the US Midwestern states. I am more worried about the approaching North America natural gas crisis than JD or most of the posters on this thread however. The reason is that higher fertilizer prices will put farmers out of business and contribute to the growth of corporate mega-farms and land centralization.

Below is one effort I just made to address the coming ammonia fertilizer crisis:

General Electric Corp and Dow Jones are sponsoring a contest for the best environmental business plan. Grand prize is $50,000 and the contest deadline is tomorrow, Dec. 15th. What they are doing is seeking to get free ideas, research, inventions and opportunities from the public, which they can then exploit. I realize that as well as the fact that any entry has a low probability of winning. Nonetheless I submitted one without all the budgeting and delusional profit projections, because I think a solution to the natural gas - ammonia production crisis needs to be addressed and that GE certainly has the resources to develop this technological development. Following is my proposal to them:

Perhaps the worst crisis facing the USA is the imminent shortage of natural gas, which is used for heating, manufacturing plastics, refining, electrical power production and the manufacture of nitrogen fertilizer. Natural gas wells do not follow a gradual Hubbert curve, but decline dramatically. This is the situation with most of the gas fields in the US today and we will see both dramatic price rises (already happening) and critical supply shortages within five years or less.

Ours and much of the world's food supply depends upon plentiful corn yields, which depend upon ongoing and intensive usage of ammonia-nitrogen fertilizers. Almost all of this ammonia is produced by the reforming of natural gas to release hydrogen, which is then combined with atmospheric nitrogen in the Haber-Bosch process to produce ammonia. Presently farmers are being squeezed financially by higher prices of fertilizers and fuel, many into bankruptcy. A situation that will increase adversely as the natural gas shortage unfolds.

The Midwest corn belt has wind power, the northern Great Plains states much more wind power. Presently these wind resources are difficult to exploit for electrical generation because of the high cost of transmission lines to urban centers. However, wind farms can be developed which will use the electrical power locally to create hydrogen from the electrolysis of water. This hydrogen can then be piped to an adjacent Haber-Bosch processing facility to create ammonia, which can then be further processed into more complex nitrates if need be. The electrolysis plant and Haber processing plant can be combined into one manufacturing facility.

The natural gas crisis is very real and needs for low-price fertilizer absolutely critical for our food supply. Reducing one demand for natural gas will further its availability for heating and power generation until sufficient US LNG terminals are built. Producing hydrogen and then ammonia from wind powered electrolysis will soon be the low cost ammonia production solution. Iowa, Minnesota, Nebraska, Kansas, the Dakota all have substantial wind resources as well as being the agricultural heartland for corn and livestock production. Exploiting these wind resources will keep money in the local communities, minimize the cost of transporting nitrogen fertilizers to the farms and reduce the amount of natural gas demand as a shortage crisis unfolds. Besides assuring that farms have the fertilizers they need to keep our global population fed.

The wind turbines can operate year-round in some Midwest locations, but would be particularly strong in winter and spring months, so ammonia storage depots would have to be part of the Haber manufacturing facility. The cost for the wind turbines, water electrolysis plant and Haber-Bosch amonia plant would be in the tens of millions of dollars likely. The nitrogen fertilizer industry is probably in the three to five billion dollar a year range.

I don't have the technical background or resources to create such a facility, but General Electric Corp. certainly does. I am submitting this simply because this wind-powered ammonia production industry is desperately needed, not because I think my proposal has a chance of winning

 
At Thursday, January 31, 2008 at 6:16:00 PM PST, Anonymous soylent said...

"What do you suburban morons think. Chicken, cattle, fish for god's sake, now grow up on Purina Chicken Chow, Purina Cattle Chow, Purina Fish Chow for god's sake. What do you think these chows are made from? CORN."

Not where I live and I don't eat meat.

"Corn starches, corn sweeteners, corn meals, corn vegetable proteins, corn peanuts for god's sake are all made from petroleum."

Don't eat any of those god-awful things either.

 

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