Nitrogen Fertilizer Comes Full Circle

Sharp increases in prices typically result in substitution behavior or demand destruction. Prices for a ton of fertilizer, whether it be phosphate, potash or nitrogen have tripled or quadrupled over the last 18 months with no let-up in sight. Demand destruction has not occurred to date.

Prices for crops including wheat, corn, cotton and soybeans continue to be at all time highs due to global demand. Farmers are not happy about the price of fertilizer, but they can afford the higher prices. Plus, the alternative is much smaller yields for their efforts. This is one of the reasons that fertilizer stocks have been one of the safe havens of this difficult stock market.

But substitution behavior is another matter. Suddenly farmers are willing to consider alternatives to synthetic nitrogen. Here on the north side of Atlanta a new company, Organic Growing Systems, is producing nitrogen rich fertilizer from chicken manure. Disposing of manure from livestock, whether it be chickens, hogs or cows is a real problem. Turning this waste from a problem into a resource makes a lot of sense.

It was not too long ago when sustainable farming was the only option. Synthetic fertilizers had not been invented. Livestock produced manure which was composted and used to fertilize the crops and build up the soil. For hundreds of generations people practiced this type of low input, sustainable farming.

The addition of large amounts of synthetic fertilizers, much made from natural gas and petroleum, is a "high-input" model. Nutrients constantly has to be brought in to continue producing high yields. High input farming treats the soil as a sterile medium that must have artificial nutrients added for every crop for every year. Organic fertilizers feed the plants but also improve the soil.

Eliot Coleman is an icon in the field of modern organic farming. Back in the 1960's when he began growing crops for the commercial market, he didn't have enough money for synthetic fertilizers. Synthetic fertilizers were being touted as nutritionally identical to the traditional organic types. Since he could get organic nutrients on the cheap, he was happy to buy into the "nutritionally identical" story - although not in the way the fertilizer companies desired.

Today there is a growing realization that organics offer a viable substitute - while solving the waste problem at the same time. Nitrogen intensive crops such as corn and sod offer the chance for farmers to save money and not rely on fertizlers that use fossil fuel as feedstock.

Organic Growing Systems can currently produce 30 tons of nitrogen rich chicken fertilizer a day. They are expanding to produce 200 tons a day. It is an idea that is coming full circle.