Global demand for nitrogen is strong, but challenges such as oversupply and geopolitical risk could darken skies for fertilizer producers, according to Alistair Wallace, senior consultant for nitrogen for CRU Fertilizers, based in London.
"More crop acres and increased application rates across the world have pushed total nitrogen fertilizer demand from 81 million metric tons in 2000 to 105 mmt in 2010, to 116 mmt in 2014," Wallace said. "It is expected to be 128 mmt by the year 2019."
Speaking at the 2014 Fertilizer Outlook and Technology Conference this fall in Savannah, Ga., Wallace said nitrogen demand is on the increase thanks to a growing world population that needs more food.
World population (and thus nitrogen consumption) was a fairly flat line from 1750 to 1950, but since then, both have increased dramatically, Wallace said.
Fertilizer producers responded to the increased nitrogen demand by building more world capacity in the last 10 years than in the previous 25 years.
Increased urea supply between now and 2019 will come from China, North America, the former Soviet Union, Africa and Latin America. In fact, capacity growth is now outstripping demand. Beginning in 2014, capacity is expected to be more than consumption through 2019, he said.
"It almost feels like the world is drowning in a sea of nitrogen," Wallace said.
NORTH AMERICA EXPANSION
North American nitrogen production is set to increase from under 15 million tons a year in 2010 to an estimated 20 mt a year in 2018. North American nitrogen demand is set to increase as well, going from 21 mt in 2010 to a forecast 24 mt in 2018.
CHS, Inc. is taking advantage of the Northern Plains oil and natural gas supply by building a nearly $3 billion nitrogen fertilizer plant near Spiritwood, N.D., according to Brian Schouveiller, senior vice president for ag business North America for CHS, during a presentation at the 2014 DTN/The Progressive Farmer Ag Summit.
Currently, the U.S. imports about 7.2 mt of urea, the vast majority from the Middle East/North Africa. In 2016, U.S. production will overtake imports as several nitrogen plants around the country come online, he said. "By adding fertilizer capability, we will eliminate much of these imports over time," Schouveiller said.
The U.S. is competitive against the global marketplace at current natural gas prices. From a simple cost of production, the CHS facility would be at about $124 a ton, compared to the Middle East/North Africa, which averages $80 a ton. Yet, once transportation from that region is factored in, domestic natural gas has a price advantage over the 70-day shipping cost to upper Midwest. All of these costs related to energy should be coming down in the future.
Iowa Fertilizer Company is building a nitrogen fertilizer plant near Wever, Iowa. The plant is near 75% complete and the facility is on track to operate in the fourth quarter of 2015, according to the company.
Once completed, the plant will have a yearly capacity of more than 1.5 mt and will produce urea, UAN and ammonia, as well as diesel exhaust fluid (DEF).
CF Industries began $3.8 billion in nitrogen capacity expansion projects in 2012, which include new ammonia, urea and UAN plants in Donaldsonville, La., and a new urea and ammonia plants at the Port Neal Nitrogen Complex in Sergeant Bluff, Iowa. According to the company, the plants are progressing on time and on budget. The plants at Donaldsonville are expected to come online in the latter half of 2015, and the remaining plants are set to operate in 2016.
So if their is lots and lots and lots of product their and coming on line and lots of cheap natural gas to produce the product. Why The F%?k are we paying more in 2015 than we did last year. Yes the USA dollar is up but this is Canada and its made just down the road.
Ah farming where nothing makes sense.
"More crop acres and increased application rates across the world have pushed total nitrogen fertilizer demand from 81 million metric tons in 2000 to 105 mmt in 2010, to 116 mmt in 2014," Wallace said. "It is expected to be 128 mmt by the year 2019."
Speaking at the 2014 Fertilizer Outlook and Technology Conference this fall in Savannah, Ga., Wallace said nitrogen demand is on the increase thanks to a growing world population that needs more food.
World population (and thus nitrogen consumption) was a fairly flat line from 1750 to 1950, but since then, both have increased dramatically, Wallace said.
Fertilizer producers responded to the increased nitrogen demand by building more world capacity in the last 10 years than in the previous 25 years.
Increased urea supply between now and 2019 will come from China, North America, the former Soviet Union, Africa and Latin America. In fact, capacity growth is now outstripping demand. Beginning in 2014, capacity is expected to be more than consumption through 2019, he said.
"It almost feels like the world is drowning in a sea of nitrogen," Wallace said.
NORTH AMERICA EXPANSION
North American nitrogen production is set to increase from under 15 million tons a year in 2010 to an estimated 20 mt a year in 2018. North American nitrogen demand is set to increase as well, going from 21 mt in 2010 to a forecast 24 mt in 2018.
CHS, Inc. is taking advantage of the Northern Plains oil and natural gas supply by building a nearly $3 billion nitrogen fertilizer plant near Spiritwood, N.D., according to Brian Schouveiller, senior vice president for ag business North America for CHS, during a presentation at the 2014 DTN/The Progressive Farmer Ag Summit.
Currently, the U.S. imports about 7.2 mt of urea, the vast majority from the Middle East/North Africa. In 2016, U.S. production will overtake imports as several nitrogen plants around the country come online, he said. "By adding fertilizer capability, we will eliminate much of these imports over time," Schouveiller said.
The U.S. is competitive against the global marketplace at current natural gas prices. From a simple cost of production, the CHS facility would be at about $124 a ton, compared to the Middle East/North Africa, which averages $80 a ton. Yet, once transportation from that region is factored in, domestic natural gas has a price advantage over the 70-day shipping cost to upper Midwest. All of these costs related to energy should be coming down in the future.
Iowa Fertilizer Company is building a nitrogen fertilizer plant near Wever, Iowa. The plant is near 75% complete and the facility is on track to operate in the fourth quarter of 2015, according to the company.
Once completed, the plant will have a yearly capacity of more than 1.5 mt and will produce urea, UAN and ammonia, as well as diesel exhaust fluid (DEF).
CF Industries began $3.8 billion in nitrogen capacity expansion projects in 2012, which include new ammonia, urea and UAN plants in Donaldsonville, La., and a new urea and ammonia plants at the Port Neal Nitrogen Complex in Sergeant Bluff, Iowa. According to the company, the plants are progressing on time and on budget. The plants at Donaldsonville are expected to come online in the latter half of 2015, and the remaining plants are set to operate in 2016.
So if their is lots and lots and lots of product their and coming on line and lots of cheap natural gas to produce the product. Why The F%?k are we paying more in 2015 than we did last year. Yes the USA dollar is up but this is Canada and its made just down the road.
Ah farming where nothing makes sense.
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