Saturday, November 26, 2022

Mike Straumietis on the Surging Price of Fertilizer and Its Impact on the Industry

According to Mike Straumietis, founder and CEO of Advanced Nutrients, the rise in fertilizer prices and worries about future supply has been a major concern for farmers and ranchers alike. As they begin to plan their potential purchases for the 2022 growth cycle, some farmers’ main concerns involve fertilizer prices, which usually comprise around 15% of total outlays for farmers in the United States. In addition, some farmers estimate that fertilizer prices have increased by more than 300% since early 2020 amidst unstable delivery schedules.

How the Surge in Fertilizer Prices is Affecting the Growing Industry

For farmers, these issues are not new. In April 2008, potash prices rose by 100%, phosphate prices went up by 93%, and nitrogen prices increased by more than 30%. These elevated mineral prices remained until the close of 2009. Strong domestic and overseas demand, declining stocks, and the difficulty of the local fertilizer sector to optimize production all resulted in an increase in fertilizer prices in 2008. The same variables and other worries, according to Mike Straumietis, are to current increased prices.

The Crucial Components Contributing to the Increase in Fertilizer Prices

Mike Straumietis explains that rising prices have adversely affected all the crucial nutrients required for the growth of a country’s main row crops, including potassium or potash, phosphorus, and nitrogen (in the forms of monoammonium phosphate and diammonium phosphate). For example, in comparison to September 2020 pricing, the cost of ammonia has increased by over 210%, liquid nitrogen by over 159%, urea by over 155%, MAP by 125%, DAP by more than 100%, and potash by more than 134%.

Moreover, Mike Straumietis notes that the cost of additional fertilizer nutrients is changing due to several factors. For instance, surface mining is used to convert phosphate rock from raw material to its finished state for use and sale. With the aid of massive draglines that may reach up to five stories, the soil and rock that cover the phosphate are extracted. Both in size and cost, these draglines are enormous. This is just one of several factors, points out Mike Straumietis, that affect the cost of fertilizer nutrients.


How the COVID-19 Pandemic Caused Further Delays

The COVID-19 outbreak further slowed facility turnaround times, preventing them from clearing their production delay. This, in turn, caused more production halts, either for routine maintenance or even problems that developed because of postponing maintenance. The safety of fertilizer manufacturing facilities and the integrity of chemical processes depend on regular plant turnarounds. Consequently, production facilities implemented precautionary steps, and businesses contracted to carry out stated turnarounds were asked to postpone visits until it was considered safe to send external workers of these plants back on site.


The Factory Problems in the EU

Another factor causing the price increase is the closure of numerous EU nitrogen factories. It is also evident that, on average, the construction of these reactors takes three to five years and costs $3 to $5 billion. According to Mike Straumietis, the long-term effects reflect this surge in demand. When this occurs, it will take three to five years and cost between $3 and $5 billion to fulfill supplies using a different production site. Even though the United States has added more manufacturing facilities over the previous few years, all these production interruptions have led to an overall decline in supply.

About Mike Straumietis and Advanced Nutrients

Mike Straumietis and the Advanced Nutrients team developed the first and only complete growing system that optimizes all stages of the vegetative and bloom cycles so that crops can achieve their true genetic potential.

Under the leadership of Mike Straumietis, the Advanced Nutrients research team, which consists of a large and diverse group of highly skilled and competent Ph.D. level scientists, has developed a broad spectrum of next-generation products to nourish crops from seed to senescence. In addition, founder, and CEO Mike Straumietis, through various agricultural investments, has provided life-giving essentials to thousands of people worldwide.