Jesse Allen sits down with Corey Rosenbusch, President and CEO of The Fertilizer Institute at the NAFB convention in Kansas City, MO.
Q: I’m sure a lot of folks are talking to you about fertilizer related topics, issues, etc. Let’s start with what the global fertilizer picture looking like right now. We’ve had a lot of geopolitics that have been in influence. We have our own elections that have concluded. How do things stand globally right now in the fertilizer markets?
A: Well, compared to two years ago when we were talking, it looks terrific. It was one crisis after the other then. So, I would say generally speaking, farmers have to be pretty happy.
We’re looking at prices below where the 10-year average were for nitrogen and potash products. We’re down about 50% where we were in 2022. So somewhat of a good story for growers – my members probably aren’t happy about that, but we work in agriculture, and we live in these cycles. Phosphate continues to be a little bit of a different story, a little bit tighter out there in the marketplace.
But generally speaking, a lot of the geopolitical challenges we saw with Russia have kind of worked itself through the supply chain. China still is a place that we watch, especially with their restrictions on nitrogen and phosphate. China is the largest phosphate producer in the world and they’re still angling for battery production using the lithium phosphate batteries and they supply 80% of the world’s EVs.
Q: I think about the geopolitical issues, and I’ll bring it back home to our elections. We know that we’re going to see Trump Administration 2.0. There’s been a lot of talk of tariffs from President Trump. Are we concerned about that rhetoric in terms of what it could mean for fertilizer imports to the US?
A: I would absolutely be concerned about that, and I’ve been hearing a lot about it from our member companies. Obviously, we have a lot of global companies and a lot of domestic producers. So, this is always on their mind.
I think the concern would be any across the board tariff – especially on imported fertilizer – would have significant impact on the marketplace going forward. You know, on the other hand, a lot of the member companies are optimistic about what a Trump Administration 2.0 means for regulatory certainty, regulatory red tape permitting especially is a big challenge in the industry. And so there’s always the good and the bad and probably some ugly in there too. Probably both sides of that coin.
Q: We’ll have some more certainty, I’m sure as the weeks and months roll along?
A: For sure. And I think one thing that I should probably mention that we’re watching closely is the Inflation Reduction Act. I think the Trump administration and some of the American First Policy Institute signaling – that’s kind of the Trump policy think tank that they will completely wipe out the Inflation Reduction Act. And there are a number of tax incentives under the 45 tax law that have led to billions of dollars of investment from the fertilizer industry into things like low carbon ammonia, but also into some of the sustainable jet fuel policy around using enhanced efficiency fertilizers.
And if that comes completely off the board without preserving some of those tax credits, that could be alarming.
Q: What about here at home with logistics? Let’s talk about that fertilizer fall application season that has been a little slow this year. We’ve had our challenges with rail rivers, you name it. Where do things stand on the logistic front right now?
A: I think on the positive side we saw fantastic yields, which means there was a lot of nutrients that need to be replaced. So that was good for the industry and good for our ag retailers.
The river has been a major challenge. Well, go back to the rail strike in Canada. Of course that had an impact on production. Thankfully it was short lived. You had the hurricane in Florida. I think 250,000 tons that was referenced as potential out of the supply chain there because of the hurricane. That’s all now been rectified and is back up to speed.
The river continues to be the one I hear about the most. We had a member tell me yesterday that they have not been able to access their terminal on the Mississippi River since June. And that means that anything coming into that terminal is coming in via rail or truck. And so you’re talking about 5 or 6 times the cost of that product that ultimately gets passed on to the grower and eventually us as consumers.
Q: Thinking about just the cost as well, I know that’s been a lot of talk amongst producers with the way the economy is. Thinking about next year making decisions, are they going to want to cut some inputs, things like that? But I’ve heard from a lot of folks that, especially on the fertilizer side, you might want to be careful with where you cut things, right?
A: Historically, we have always seen that fertilizer is the one area that does not get cut in a down economy. You still need that nutrient to help ensure you’re getting that yield.
But what it does is forces folks to look at innovation. What are some tools that they can pull to be more efficient with the fertilizer, less loss to the environment, more available to the plant? Bio stimulants have been a big topic we’ve talked about before and how it helps with some of the stress that perhaps plants are going through to ensure maximum fertilizer uptake.
But the farm economy is a reality and as I talk to my board, it’s the number one issue. And we when we see a strong farm economy, the fertilizer industry does well.
Those things are typical supply demand correlations. And so I don’t know – I don’t have a crystal ball. I will tell you that the overwhelming majority of our members talking about this said that we could be in this cycle for about two years.
