This time for phosphorus supplies. Is it me or do these warnings seem to have become a regular section of the news?
As complex as the chemistry of life may be, the conditions for the vigorous growth of plants often boil down to three numbers, say, 19-12-5. Those are the percentages of nitrogen, phosphorus and potassium, prominently displayed on every package of fertilizer. In the 20th century the three nutrients enabled agriculture to increase its productivity and the world’s population to grow more than sixfold. But what is their source? We obtain nitrogen from the air, but we must mine phosphorus and potassium. The world has enough potassium to last several centuries. But phosphorus is a different story. Readily available global supplies may start running out by the end of this century. By then our population may have reached a peak that some say is beyond what the planet can sustainably feed.
Moreover, trouble may surface much sooner. As last year’s oil price swings have shown, markets can tighten long before a given resource is anywhere near its end. And reserves of phosphorus are even less evenly distributed than oil’s, raising additional supply concerns. The U.S. is the world’s second-largest producer of phosphorus (after China), at 19 percent of the total, but 65 percent of that amount comes from a single source: pit mines near Tampa, Fla., which may not last more than a few decades. Meanwhile nearly 40 percent of global reserves are controlled by a single country, Morocco, sometimes referred to as the “Saudi Arabia of phosphorus.” Although Morocco is a stable, friendly nation, the imbalance makes phosphorus a geostrategic ticking time bomb. [More]
Believe it or not, I actually visited one the largest phosphate complexes in the world in Morocco in 1988 as part of the IL Ag Leadership Program (a life-changing experience, I might add). It was a brand new facility then and needed an astronomical price to break even - something like $250/T at the time.
(Pause for sardonic laughter)
I've also seen the Florida mines which have been curtailing production due to drops in demand and foreign competition. Like the mundane potash business, suddenly the idea of shortages in the face of biofuel driven demand has added glamor to these extraction industries.
But how valid are the cries about depletion? Credible arguments can be made for "peak phosphorus" and whether it has already occurred.
Morocco's importance to the global economy is due to its control of at least 2/3 of the world's reserves of rock phosphate. The USGS has stated that there are no substitutes (.pdf) for rock phosphate in agriculture. With biofuel demand increasing steadily, and world food shortages hitting the headlines, rock phosphate is arguably as important to the world situation as oil supply. Importantly, Patrick Dery has performed a Hubbert Lineraization on world phosphorus production and estimates that we have already passed peak phosphorus (see graph below). While the importance of rock phosphate has been discussed here before, its impact on the situation between Morocco and Algeria has not. Additionally, fertilizer supplies are a critical component of many biofuel projects, creating an interrelationship between phosphate and energy supplies. Like Algeria, Morocco faces an internal Islamist insurgency (though currently less troublesome than in Algeria) and has significant demographic challenges with a population growth rate of 1.6% (graph) and sharp ethnic divides (map).
This would pique my interest had I not read too many peak-oil arguments in the last few years. They all sound plausible, but they sure as heck don't help predict oil price action or even production figures.
What these forecasts do, I think, is prime market participants toward an attitude of expectation for wild price swings. Perhaps they even become self-fulfilling prophecies as players over-react to every price swing.
Regardless, if global economies do climb out of the recession in the next few months, and consumption resumes (albeit in significantly different patterns), I'm planning on coping with wearisome MAP and DAP prices. It may be a heap-it-on strategy when prices seem less ridiculous, or serious investigation into how little my crops need, or both. But forecasting crop input costs will never be simple again, I fear.