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Fertilizers

Did you know that 60% of the world's population lives in Asia!  Yet Asia only has 20% of the world's first-quartile fertile land.  In other words, 60% of the world's population is dependent on an agricultural basis that requires one of three outcomes:  food imports, fertilizer imports or famine.  These are the only three choices.

Currently, Two of the five largest food exports, Russia and Ukraine are largely offline, and the world's second-largest exporter of fertilizer is also offline (Russia again).  The impact of this is not only felt in Asia which has seen explosive food price rises, but also, and almost more importantly, in Brazil, the world's 4th largest food exporter and the world's fourth largest fertilizer importer.  Brazil used to import 100% of its Potash from Russia.  In 2024, Brazil is looking for a new source, and while Canada is the largest exporter of Potash in the world, its production is fully committed for 2024 and even its 2025 and 2026 production (20% rise) has already been sold to users.  China has been scrambling for fertilizers (Germany has stopped producing as the flow of Natural Gas from Russia shut down) and Africa is now the continent suffering the most from fertilizer shortage.  

The 2023 American agricultural exports have been one of the best in the past 15 years.  Production far exceeded the anticipated level leaving the world with a food surplus for the year.  However, it would be unusual for the US agricultural sector to achieve this kind of performance two years in a row.  A combination of excellent weather and input costs made 2023 the most profitable year for US farmers in a very long time.

The same is also true for Canadian farmers, the other major food exporters, and the combined production for both economies is almost sufficient to make up for the loss of Russian and Ukrainian production.  Again, it would be unusual for the weather to cooperate two years in a row.  Still, anything is possible.  However, the longer-term trend is that food and fertilizer shortages are more likely and that certain areas will suffer.  

We should not forget that the "Arab Spring Protests" were first about food prices -- another indicator of scarcity.  

Just a thought that percolates out there

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