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The State of the Fertilizer Market

Worms in dirt

The fertilizer industry currently stands as a distinctive market commodity, influenced by a mix of geopolitical tensions, trade restrictions, and a paradigm shift towards sustainable practices. While comprehensively covering the entire state of this complex market in a single article is unachievable, insights we were lucky to receive from two innovative companies, Pivot Bio and Nutrien, offered us valuable perspectives. Through discussions with these industry leaders, we’ve gained a deeper understanding of the current dynamics shaping the fertilizer market, highlighting both the challenges and opportunities that lie ahead.

In our discussion with Pivot Bio, a trailblazer in agricultural biotechnology, the team shared their expertise in creating microbial solutions aimed at improving crop nutrition. They highlighted the drawbacks associated with traditional fertilizer technologies and explained how their innovative approach is poised to overcome these challenges. By focusing on microbial solutions, Pivot Bio is not only addressing issues like environmental impact and efficiency but also paving the way for a more sustainable agricultural future. This conversation provided valuable insights into how cutting-edge biotechnology is transforming fertilizer practices.

In our conversation with Nutrien, a leading figure in global agricultural products and services, they elaborated on their recent advancements in the fertilizer sector. Additionally, they provided a comprehensive overview of the current supply chain challenges impacting the market. This dialogue with Nutrien offered valuable insights into how one of the industry’s major players is navigating and addressing these complex issues

About Pivot Bio

Pivot Bio is a pioneer in agricultural biotechnology, focusing on creating microbial solutions to improve crop nutrition. Their main innovation lies in engineering microbials that capture nitrogen from the atmosphere, providing a sustainable alternative to traditional synthetic fertilizers. This approach aims to enhance efficiency and yield in agriculture while reducing environmental impacts like leaching and denitrification.

Pivot Bio

Q: What is Pivot Bio?

Bill Shores: At Pivot Bio, we engineer microbials that take nitrogen from the atmosphere and feed the excess amount of it to the plants.

Logan Heinrich: One other difference between us and other fertilizer companies is that we are only in the nitrogen spaces. We aren’t working with phosphorus or potash or anything else—at least as of yet.

Q: How is your product improving efficiency, yield—those sorts of things? What are you seeing in testing?

Logan: Efficiency is a little different when you compare us to the other traditional, synthetic-type fertilizers. For one avenue, we are much more efficient, 100% versus 40%-60% for synthetic nitrogen, because our microbes are growing on the root system and feeding nitrogen directly into the plant. We don’t have to worry about leaching because of rainfall or denitrification or anything like that. It’s a little bit of a different ballgame when you talk about efficiencies with us vs. synthetics because it’s not apples to apples.

Q: What is the benefit to creating a microbial fertilizer as opposed to a synthetic fertilizer?

Dan Grefsrude: It’s more sustainable. It takes a lot of energy to produce a synthetic fertilizer. This is a biological fertilizer. It’s cleaner.

Logan: It’s much better for overall soil health. When you’re adding synthetics, you’re not just adding a fertilizer— you’re adding a lot more to that soil profile. We are cleaning up the soil a bit. We can help mitigate any type of salt runoff and we’re cutting down on leaching.

Bill: The overall carbon footprint of our product versus of a traditional synthetic is crazy. Just 12.8 ounces of our Liquid In Furrow product replaces 86 pounds of urea.

Q: How dire is the need for something like this to be adopted?

Bill: I don’t think the need is dire. But too much leaching is bad for the environment. Denitrification is bad for the environment. This is something that is naturally occurring. We have tweaked the microbes. We haven’t added anything to them. We have tweaked them just enough so they can produce nitrogen to sustain themselves and then give off excess to the plant. They’re just pulling the nitrogen from the atmosphere. It’s probably not dire, but it’s a good idea to be going in that direction.

The difference with our microbes is that they are providing that additional nitrogen that they pull from the atmosphere. Native microbes that aren’t tweaked are just giving off small amounts of nitrogen and the native microbes consume as much or more than they give off. At the end of the day, the benefit to the environment from our microbes is huge.

Dan: It all depends on what you consider dire to be. If you consider global climate change, this is one of the dominos where we can try to mitigate some of those issues. With this, we can start cutting down on overall emissions. We can start integrating different tactics on the farm level that might cut down on carbon footprint further.

This product is important though to manage your inputs better, which, to some growers, is dire. Being able to get a static input cost is much easier to manage from a grower’s perspective. This is a good product that is going to help alleviate a lot of problems at the farm level and even at the global level.

Bill: When a grower takes synthetic fertilizer to an acre, that fertilizer is left to the wolves. Mother nature can do so many things to it because it’s stored in the soil and the soil is a poor place to store these things. Our microbials are living and surviving on the root system and they’re taking and creating it right there.

Q: Are people adopting your method of doing things pretty freely or are you finding that people still need more education on what you guys are offering?

Bill: The interest is very high in what we are doing and how we are doing it. Now, keep in mind that synthetic fertilizer has been around for a century and guys are comfortable with it. They all have their nitrogen programs dialed in for their acres on their farms. Now, we are trying to fit into those systems to help change that a little bit and this is a big change for a lot of guys. You can’t just take nitrogen from some other company and substitute it. This is a different practice. It’s a living organism. But, I would say there is significant interest in our product. It’s just a matter of getting on their farms. We can do research in Fargo, ND and that might not correlate to the soil in Billings, MT—these are different environments.

Logan: I mean adoption has been pretty good if you look at our company’s rate of growth over the last couple of years. But, one of the catch22s is that we don’t replace 100% of a grower’s nitrogen needs. So, they are still using synthetic fertilizers, but not as much if you use our products. If we replaced 100% of their synthetic,

I think it would be a bigger pill to swallow for a lot of our customers. But, a lot of our customers also want to be able to replace more.

We just need to educate growers on applying these products. It’s not just farmers, it’s crop advisors as well and everyone involved.

A lot of crop advisors are aware of biologics and this part of the industry is going to continue to grow and expand, but for how long this company has been in the commercial space, I think adoption has gone fairly well.

Q: What percentage of products do you have currently?

Logan: So, our corn product is a 40 pound equivalent and our small grains product is a 25 pound. So, what we sell for corn replaces 40 pounds of nitrogen per acre.

Q: Is a 100% product something you guys are working on?

Logan: It’s something we are working towards. We have a lot of different things we are working on in the lab that we are looking to see how they transition into the real world. But our goal is to get there in 15 years. So, we have a long way to go before we get to that point, but that’s where we want to get to.

Bill: Two years ago we were at a 25 pound product for corn. Now we are at 40 pounds. The growth is there.

Q: How realistic do you guys think that 15-year goal is?

Bill: It’s the technology and the science that has allowed us to get where we are. As the science and technology continue to increase along with the knowledge that the people in the lab have, we are optimistic we can get there.

Logan: It’s kind of a loaded question because if you think even about how far things have come from 15 years ago to today. I think the industry will come out with companion technologies that are just going to make biologicals in general more efficient. We probably will get there and it might not be Pivot Bio alone. For example, corn genetics could change to the point where it’s easier.

Q: What are some of the big things that are trying to be tackled in the fertilizer realm?

Logan: For us, winter wheat has an over-wintering issue. So, we are trying to figure out how to make a bacteria that will colonize and then survive a winter. Certain bacteria do not survive well in cold environments and certain bacteria might not survive well in hot environments. Some don’t survive well during a thaw or a freeze. So, that’s one of the challenges we have to work with. We have to figure out how to get an organism to work how we want it to and as efficiently as we want it to in certain environments, including different soils. We need to work to make a bacteria that is as efficient as possible to get the outcome that we want. That’s probably the biggest hurdle and I think that’s the biggest hurdle with all fertilizer.

Bill: If you plant the winter wheat in the fall, at this point, our microbes don’t make it through the freeze in the winter. If you use our product one year, it won’t be in the soil the following year or at least we can’t identify them at this point.

My opinion on a challenge we face is the fact that the synthetic fertilizer market is so established. There are mega plants all throughout the Red River Valley and there are mega plants all over, and that’s good—we need to have that because that will help drive that end cost down for these growers. It will let us store more and have more on hand. It’s just that the acceptance of microbial products is a challenge for us. We know that the microbes will make the nitrogen we say they’re making, but proving and convincing and getting buy-in from the growers that it is actually happening is a challenge because they are so used to having and managing synthetics, and they’re good at it. We’re a new take on fertilizer so that’s a challenge.

Dan: Like Bill said, the biggest challenge is getting growers to adopt it. They are comfortable with what they are doing now. They’ve taken their entire farming careers to dial in a program that works for them and we are now an alternative source of nitrogen. So, to get into that grower’s system is challenging because they are comfortable and oftentimes like what they are doing.

Bill: We are also dealing with the ghosts of microbes past. We are the first engineered microbe on the market and I believe we are the only engineered microbe on the market. So, these farmers have had people come to their doors selling a microbial product in the past that was a standard “bug in a jug” that’s found wherever, it might not have done what we are doing because we are engineered. A regular microbe might consume as much nitrogen or more than it produces—it might have to dip into the synthetic bank—whereas ours will not do that. Our microbes will produce nitrogen itself that will go to the corn or the wheat.

Dan: Like Bill said, the biggest challenge is getting growers to adopt it. They are comfortable with what they are doing now. They’ve taken their entire farming careers to dial in a program that works for them and we are now an alternative source of nitrogen. So, to get into that grower’s system is challenging because they are comfortable and oftentimes like what they are doing.

Bill: We are also dealing with the ghosts of microbes past. We are the first engineered microbe on the market and I believe we are the only engineered microbe on the market. So, these farmers have had people come to their doors selling a microbial product in the past that was a standard “bug in a jug” that’s found wherever, it might not have done what we are doing because we are engineered. A regular microbe might consume as much nitrogen or more than it produces—it might have to dip into the synthetic bank—whereas ours will not do that. Our microbes will produce nitrogen itself that will go to the corn or the wheat.

Learn More About Pivot Bio
Facebook | /PivotBio
Instagram | @pivotbio
Youtube | @PivotBio
Twitter | @PivotBio
Linkedin | /company/pivot-bio/

Nutrien’s Dr. Karl Wyant on Supply Chain Issues and the Evolving Fertilizer Landscape

Q: What trends do you see in the fertilizer landscape and where does Nutrien fit in?

A: Broadly speaking, we see an increase in yield and that’s regardless of the crop or geography. Yields tend to go up over time and if you want to keep the soil productive, you need to stay in lockstep with what nutrients we are replacing, that’s where fertilizer comes in.

Over time, we see an increase in demand for fertilizers. If you think about the last 50 years, there has been an upward trend in nitrogen, phosphorous, and potassium demand. One thing that makes us excited at Nutrien is the continued look at fertilizer affordability.

2022 was a challenging year because of supply chains and challenging supply and demand.

Coming into 2024, we are looking at a much-improved fertilizer affordability index across the NPK spectrum.

Q: You mentioned the supply chain issues of 2022 what issues are you facing right now?

A: You have to get the materials from either a mine up in Saskatoon, a mine from coastal North Carolina, or Florida, or a number of the other nitrogen manufacturing facilities that are across the globe. Moving that fertilizer is so important. That’s where we’ve had some challenges.

We’ve had some droughts hit the Midwest of the United States and that has caused some issues with getting materials up and down the Missouri River. We’ve had to find alternatives with rail, truck, that sort of thing.

On a bigger picture, the Panama Canal is also under drought conditions so there is difficulty there and we’ve had to find other methods of transport.

Locally, we’ve had trouble with finding truck drivers. We’ve had challenges finding space on the railroads.

Every year, there is something and it seems like the droughts in the waterways are the big thing this year.

Q: Is Nutrien doing anything innovative?

A: Folks are always trying to improve how to apply nutrients.

If you look at human history, we went through a lot of times when we didn’t have a lot of nutrients to apply and we struggled with feeding people.

We used manure for a long time. We mined islands for bird guano for a long time, but there are only so many bird guano islands out there.

The fertilizers that Nutrien sells, the urea, the ammonia phosphate, ammonia polyphosphate, the potash, these are crucial innovations in human history because we now have nutrients in a dense form—it’s mined, manufactured, has a spec sheet, and you can do some predictions with it. It’s hard to utilize manure like that because it is not nearly as dense—it takes a lot more manure to satisfy the nutrient demand for crops. So, we continue down that path.

We also are trying to innovate and have a couple of products that fall under that spectrum, including our Environmental Smart Nitrogen 4400, which has a polymer coating that releases nitrogen in a slower and more predictable manner which makes sure the nitrogen can stays in the soil longer. We also have Smart Nutrition MAT + MSP 9436015F which is a granual of a very familiar phosphate product, which also has a small particle size and sulfur built into it so a grower can provide another type of nutrient without any more work.

The space continues to innovate. At the end of my career, who knows what we will be doing. It will probably be some pretty fun stuff. Agriculture continues to innovate.

Q: What are some of the big problems fertilizer companies are trying to tackle in the space right now?

A: The supply chain hurdle and this increasing recognition to drive sustainability in the fertilizer mining and manufacturing sector. We are looking at how we can more sustainably make fertilizer and lower the carbon footprint per ton of fertilizer production.

We are also trying to make sure we are taking a look at some of these greenhouse gas emissions like keeping track of the nitrous oxide coming off the soil. We have some big initiatives in Canada right now looking at N2O emissions. We are looking at how we can add ingredients to your typical fertilizers to not only keep it around and in the soil and make sure you are growing a good crop but also make sure you are not releasing greenhouse gasses into the atmosphere.

Q: What differentiates Nutrien from some of the other fertilizer companies out there?

A: Nutrien prides itself on people, knowledge, exceptional logistics, and end product. We not only are the world’s largest miner of NPK fertilizer, but we also bring considerable knowledge about the fertilizer markets—this macro economy of fertilizer moving through the globe. We also bring the agronomy and look at how to make sure we are using fertilizer on a farm to make sure we are finding the best way possible to help optimize the benefits and minimize things like runoff and greenhouse gas emissions.

Q: Do you have any advice for growers out there right now?

A: It’s never too early to start planning. The supply chain has always been there, but now, with what we have learned about supply chains, thinking about your fertilizer demand and reviewing your crop nutrient plans, soil tests, and yield goals is a great place to start.

You can start asking yourself what small changes you can make from the year before and start making sure your favorite ag dealers can start bringing the products in and fertilizer would be one of those things. It’s important to make sure that when it comes to planting, you are not caught without any of the products that you need.

Q: How have the recent developments in technology affected the fertilizer industry?

A: Nutrien is in a unique spot. We aren’t just a producer of fertilizer, we are also selling it. If you go further down, we are also selling it to growers. So, we are in a unique spot in the supply chain.

When it comes to technologies in mining and manufacturing, we are working on improving our extraction processes so that we can get varying product qualities that extend the life of the mine. We are focusing on some of these predictive models that help with supply chain planning and forecasting so that we can be ready despite all of the volatility of a global market.

On the agronomy side, we have a continued commitment to using our data to find the right timing of application, the right ratio of fertilizer to use, the right place relevant to the plant, and the right source. Not all fertilizers are the same. You have different sources. Finding the right source is important. So we are trying to make sure that that input is optimized and that we are improving the efficiency of uptake and that the grower is getting everything they can out of that purchase.

Not all fertilizers are the same. Sometimes there is something you can add to an existing technology that improves it. Growers are continually looking for new and improved fertilizers.

Q: What are the key takeaways you would leave to the audience?

One thing you can think about when it comes to fertilizer is that it is at the same time very local because farmers are placing their orders right down the road, but at the same time, fertilizers are very global because they are traded as commodities all over the planet. So, depending on where you are, there might be another country trying to get ahold of that supply because they are trying to grow their own crops.

Learn More About Nutrien
Facebook | /eKonomicsAg
Instagram | /eKonomicsAg
Youtube | @NutrieneKonomics
Linkedin | /showcase/nutrien-ekonomics

It’s clear that the fertilizer industry stands at the crossroads of innovation, sustainability, and global challenges. PivotBio’s commitment to microbial solutions and Nutrien’s focus on sustainable practices and supply chain resilience highlights a larger industry trend towards more eco-friendly and efficient fertilization methods. As the world grapples with food security and environmental sustainability, the role of companies like PivotBio and Nutrien becomes increasingly significant, shaping the way we approach crop nutrition and agricultural productivity in the years to come.

What do you think?

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