Growers in the U.S. could see a renewed global focus on P&K remove some demand from the global N market as the world comes to terms with the implications of NPK imbalances. That along with new domestic N production capacity could lower nitrogen pricing even farther here in the U.S. by 2017 and beyond.
"Nitrogen, Phosphate and Potash fertilizer application is characterized by notable under and over application, of nutrients, neither of which is sustainable in the long term", says Oliver Hatfield, Director of fertilizer at Integer Research. "A move towards more efficient fertilizer use will mean an adjustment of application rates and will lead to a redistribution of fertilizer demand geographically."
According to U.K.'s Integer Research, use efficiency will also influence the balance between the nutrients. Nitrogen has represented much of the growth in fertilizer demand over the past two decades, but expectations are that N demand will represent only about one fifth of global total fertilizer demand change between 2010 and 2030.
Phosphate and Potash demand, on the other hand, will account for an increasing share of total fertilizer demand growth to 2030. P is equally over applied in some regions such as India and China and application growth in these regions is likely to moderate. This will be balanced by a significant rise in P demand in Latin America. Increase in K demand represents the biggest change. K is under applied across most regions and is projected to rise by more than double the growth rate of N over the period 2010 to 2030.
Meanwhile, U.S. growers have banked P&K over the last few fertilizer years according to data from Mosaic and other industry sources. This is due in large part to strength in new-crop revenue which lends itself to a profitable margin for NPK. In order for other nations to be able to effectively utilize inputs, crop pricing will have to play a role.
However, government subsidies are becoming the rule of the day when it comes to national fertilizer policy. If crop prices do not support themselves in those nations, government money in the form of NPK subsidies will have been wasted. Healthy crops require proper fertilization and a complete nutrient profile. As the United States leads the World in agronomy and in understanding of the soil, the payoff for the American grower may come in the form of nitrogen pricing decreases in the coming years.