State of the US fertilizer industry

COUNTRY REPORT

State of the US fertilizer industry

We report on the state of US fertilizer production and supply. The US industry – the second-largest finished phosphates producer and third-largest urea producer globally – has grown and developed alongside North America’s mature and sophisticated domestic farming sector.

The US fertilizer industry contributes almost $131 billion to the domestic economy and directly employs more than 100,000 full time staff, according to The Fertilizer Institute (TFI).

In 2018, the country’s fertilizer producers:

• On average, invested a total of $2.4 billion annually in capital expenditure projects
• Captured and reused 29 percent of their greenhouse gas (GHG) emissions
• Recovered over 101 million gigajoules (GJ) of waste heat, equivalent to almost 41 percent of total energy use
• Recycled 282 billion gallons of water l Invested $1.2 million in the 4R nutrient stewardship fund
• Sold almost 437,000 tonnes of enhanced efficiency fertilizers (EEFs), on a nitrogen tonnage basis
• Reported a lost time incident rate of 0.48, meaning that US fertilizer manufacturing is 2-3 times safer than its industry peers.

These economic, environmental and social performance indicators were updated yearly for participants in TFI’s annual State of the Fertilizer Industry Report This report was published for five consecutive years between 2015 and 2019, with TFI opting to release a more limited set of sustainability metrics last year. The fifteen fertilizer manufacturing companies who contributed to the 2019 report collectively accounted for 91 percent of total US nitrogen, phosphate, and potash production capacity1 .

Overview

The United States is the world’s third-largest fertilizer consuming region, being responsible for almost 11 percent of global consumption and ranked behind only China and India globally (Figure 1). On an individual nutrient basis, the country is also the world’s third largest nitrogen and potash consumer and fourth largest consumer of phosphates (Figures 2-4).

Fig. 1: Top five fertilizer-consuming countries*, 2019

Fig. 2: Top five nitrogen-consuming countries*, 2019

Fig. 3: Top five phosphate-consuming countries*, 2019

Fig. 4: Top five potash-consuming countries*, 2019

Fig. 5: Top five nitrogen-producing countries*, by capacity, 2019

Fig. 6: Top phosphate-producing countries*, by capacity, 2019

Fig. 7: Major US urea producers, by capacity*, 2019

Fig. 8: Top 10 US urea production plants, by company, location and capacity*, 2019

Fig. 9: North American phosphate plants

Fig. 10: US phosphate producers, by capacity*, 2019

The United States has developed a large-scale and technologically advanced domestic fertilizer industry to satisfy the high demand generated by its sizeable, sophisticated and mature agricultural sector. By capacity, the country is the world’s second and third largest phosphate and nitrogen fertilizer producer, respectively (Figures 5-6), as well as being the tenth largest potash producing country globally.

Overall, the US fertilizer industry, is ranked fourth globally, in terms of total production capacity (22.2 million nutrient tonnes), exceeded only by China (81.3 million nutrient tonnes), Russia (31.7 million nutrient tonnes) and its northern neighbour Canada (26.9 million nutrient tonnes).

Urea production

The US operated 12.4 million tonnes of urea production capacity. This is mainly in the hands of CF Industries, Nutrien, Koch industries and the Iowa Fertilizer Co, with these four companies combined owning 88 percent of domestic urea capacity (Figure 7). This group of powerhouse companies also operate nine of the 10 largest US urea production plants (Figures 8 & 9). Illinois-headquartered CF industries is the largest US nitrogen fertilizer producer by far, owning almost half (49 percent) of domestic urea capacity, more than three times the scale of its nearest rival Nutrien.

Phosphates production

The US can draw on 11.2 million tonnes of domestic production capacity for diammonium phosphate and monoammonium phosphate (DAP and MAP). Following several decades of consolidation, phosphate industry ownership is highly concentrated (Fertilizer International 496, p40) with just four companies – Mosaic, Nutrien, JR Simplot and Itafos – operating nine DAP/MAP production sites across Florida, Idaho, Louisiana, North Carolina and Wyoming (Figure 9).

“The US fertilizer industry contributes almost $131 billion to the domestic economy and directly employs more than 100,000 full time staff.”

Florida-headquartered Mosaic is the dominant US phosphates market player (Figure 10). It operates around 8.6 million tonnes of DAP/MAP capacity from four sites in Florida and Louisiana. This includes New Wales, the country’s largest phosphates production complex (Figure 11).

Fig. 11: US phosphate production plants, by company, location and capacity*, 2019

Fig. 12: US muriate of potash (MOP) production plants, by company, location and capacity*, 2019

Potash

Intrepid Potash is the sole US supplier of muriate of potash (MOP, KCl). The company has the capacity to produce around 390,000 tonnes of potash annually via solar evaporation from three mining sites (Figures 9 and 12):

• The HB solution mine in Carlsbad, New Mexico
• The Moab solution mine in Utah
• The brine recovery operation in Wendover, Utah.

Imports and exports

Due to its limited domestic production capabilities – versus the scale of agricultural demand – the US is the world’s third largest potash importing country, after Brazil and China. The country imported 7.8 million tonnes of MOP in 2019, sourcing much of this from neighbouring Canada as well as Belarus and Russia.

The US falls well outside the global top 10 list of urea exporting countries, exporting just 575,000 tonnes in 2019. That compares to domestic production for the year of 10.9 million tonnes of urea, supplemented by imports of 4.6 million tonnes. Indeed, the US is a major urea import market currently, being ranked the third largest globally. The country’s top three urea suppliers in 2019 were Qatar, Canada and Saudi Arabia.

In recent years, the US has been both a major importer and exporter of phosphate fertilizers. In 2019, the country was ranked the world’s fourth largest DAP/MAP exporter (4.0 million tonnes) and the world’s third largest DAP/MAP importing country (2.9 million tonnes). Overall, the US ran a DAP/MAP export surplus of 1.1 million tonnes in 2019 out of a total domestic production of 7.0 million tonnes.

Import tariffs and shifting trade patterns

The imposition of US import duties on Moroccan and Russian phosphate fertilizers towards the end of 2020 (Fertilizer International 500, p8) has had a major market impact, both on the US market and global trade flows. Both Russia and Morocco have essentially stopped exporting to the US, causing domestic phosphate shortages and price hikes. Consequently, US prices are now at a premium in comparison to international price levels.

To make up the domestic shortfall, the US is expected to import more phosphate products from Saudi Arabia, Australia, Mexico, Jordan and Egypt in future. Some US exports are also likely to be diverted away from Brazil and Canada and be earmarked for the home market instead, to be replaced by Moroccan and Russian product (Fertilizer International 502, p42).

“US countervailing duties are likely to remain through 2025, perhaps longer, and phosphate trade will consequently remain disrupted. This new pattern of trade is expected to last,” CRU analyst Glen Kurokawa commented in March.

The imposition of phosphate duties followed the successful petitioning of US authorities by The Mosaic Company (Fertilizer International 497, p8). Similarly, CF Industries is currently petitioning the US Department of Commerce for tariffs to be imposed on imports of urea ammonium nitrate (UAN) from Russia and Trinidad and Tobago.

References

1. TFI, 2019. 2019 State of the Fertilizer Industry Report. The Fertilizer Institute, Washington.

2. Nutrien, 2020. Nutrien Fact Book 2020. Nutrien, Saskatoon, September 2020.