U.S. Fertilizer Makers Invest Billions Amid Wartime Supply Woes

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Written by Will Ploch, Assistant Editor-in-Chief for IIR News Intelligence (Sugar Land, Texas)

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Summary

More projects to establish or expand fertilizer production are springing up across the U.S., as the U.S.-Iranian conflict is creating supply constraints--and financial woes--for farmers and other fertilizer consumers.

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Fertilizer Growth from the Grassroots

The U.S.-Iranian conflict has spawned countless headlines about oil prices, but another commodity is proving to be a pricey problem for American consumers: fertilizer, global prices for which have increased by roughly 50% since fighting began, according to the World Bank's fertilizer price index. The fertilizer market and the Trump administration are responding with a host of new projects and policies to boost domestic production.

Industrial Info Resources is tracking more than $2.7 billion worth of U.S.-based fertilizer-related projects that are set to kick off through the end of September, led by a massive ammonia development in central Illinois.

According to Industrial Info Resources data, 95% of the total investment is attributed to a handful of grassroot developments. Cronus Chemicals LLC's fertilizer plant in Tuscola, Illinois, which has been in development since 2014. The facility is designed to produce about 860,000 metric tons per year of ammonia, the bulk of which will go toward urea production.

Cronus, which is primarily owned by Keyman-Avunduk Investment Company AG, benefited from nearly $40 million in state tax incentives, although recent delays in the project could imperil a portion of that amount. Industrial Info Resources offers more information on the Tuscola project in its Global Market Intelligence (GMI) Chemical Processing Plant and Project databases, where readers can find details--including construction schedules, investment values and necessary equipment--in a detailed plant profile and project report.

Other grassroot projects include Sedron Technologies' waste-to-fertilizer plant in Indiantown, Florida, which will use biosolid waste provided by Synagro Technologies; and Soil Carbon Partners Incorporated's Pike County Fertilizers Plant in Pikeville, Kentucky, which is designed to produce 780,000 tons per year of dry bulk powder fertilizer. Readers can learn more from detailed reports on the Indiantown and Pikeville projects.

By the Numbers

• More than $2.7 billion: Total value of U.S.-based fertilizer-related projects set to kick off through the end of September
• About 70%: Percentage of U.S. farmers who are unable to afford all the fertilizer they need, according to a recent survey
• Nearly 60%: Percentage of the same group who are reporting worsening finances

Hormuz Havoc Hits Home

The ongoing conflict in Iran and the resulting chaos in the Strait of Hormuz is creating headaches for farmers worldwide, as prices for fertilizer and its components have risen sharply in recent months. Roughly 30% of the global fertilizer trade passes through Hormuz, and disruptions to the supply chain spurred the Trump administration in late June to suspend countervailing duties on phosphate fertilizer imports from Morocco for up to eight months.

An April survey of more than 5,700 farmers indicated about 70% were unable to afford all the fertilizer they needed, according to Farm Bureau Intel. It also found nearly 60% reported worsening finances, which were attributed largely to rising costs for fertilizer and diesel fuel.

Last week, the U.S. Department of Agriculture (USDA) announced it was launching the Fertilizer Investment & Expansion for Long-Term Domestic Supply (FIELDS) Program, a $500 million initiative to expand domestic fertilizer manufacturing. The USDA says the program "is intended to expand, or bring into operation new, independent domestic fertilizer production capacity in order to provide agricultural producers with additional domestic fertilizer options and strengthen the U.S. fertilizer supply chain.

Some fertilizer companies already are preparing to expand their facilities, however. Nebraskaland Aviation, a subsidiary of Westerlin-Harrington Flying Service, is preparing for a second-phase expansion of its Iron Horse Fertilizer Plant in Holdrege, Nebraska, which include liquid fertilizer equipment and storage; presently, the facility is able to hold up to 6,665 tons of dry fertilizer. Readers can consult a detailed plant profile and project report.

Worm Power, a subsidiary of Alltech, is preparing to expand its fertilizer and compost plant in Avon, New York. The company aims to boost its production of vermicompost, a process that uses worms to decompose food scraps and organic waste into fertilizer. Readers can consult a detailed plant profile and project report.

The Industrial Info Resources GMI Project and Plant databases offer a full list of detailed reports for projects mentioned in this article, and a full list of related plant profiles.

Industrial Info Resources also offers a full list of reports for U.S.-based fertilizer-related projects that are set to kick off through the end of September.

Key Takeaways

• Prices for fertilizer and its components have risen sharply since the U.S.-Iranian conflict began.
• Roughly 30% of the global fertilizer trade has been imperiled by the stoppage of activity in the Strait of Hormuz.
• The USDA is launching a $500 million initiative to expand domestic fertilizer manufacturing.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).