Much of the American agricultural industry has had a tough few years.
A robust US economy has kept the dollar strong, hurricanes, flooding, and wildfires have decimated many rural areas, while the ending of a 4-year drought on the West Coast has only brought recent relief to farmers.
Most significantly, the ongoing US/China trade war has kept tariffs in place on many American agricultural exports, such as pork meat, corn, and soy. This has resulted in a massive slump in trade, as a PBS report notes, “American agricultural exports to China fell from $15.8 billion in 2017 to $5.9 billion in 2018, according to the U.S. International Trade Administration, and exports have remained depressed in 2019.”
This has impacted farmers in every state. As the report adds, “The agriculture sector had record levels of debt in 2019 and the highest number of bankruptcies since 2011. In October, the United States Department of Agriculture (USDA) projected that farm debt in 2019 would be a record high $416 billion, with $257 billion in real estate debt and $159 billion in non-real estate debt. Adjusting for inflation, the value of debt increased 1.5% between 2018 and 2019.”
While government aid has helped many farmers stay solvent, most have remained in business by making cuts to expenses.
Logically, one of the first costs for farmers to reduce would be fertilizers. Yet surprisingly, one of the agricultural inputs seeing biggest growth is the micronutrient sector.
As the industry journal CropLife reports, “… according to the 2019 CropLife 100 survey, 53% of the nation’s top ag retailers saw their micronutrients revenue increased between 1% and more than 5% during the 2019 growing season. More impressively, this continued upon a long-term growth trend for micronutrients, where year-over-year sales increases have been recorded by more than 50% of CropLife 100 ag retailers for three of the past four years (51% in 2016, 55% in 2018, and 53% in 2019; the exception being in 2017, when the figure was 45%).”
Much of this expansion is based on the expanded planting of corn. As CropLife notes, “… early USDA projections show approximately 95 million acres of corn expected to go into the ground, an increase of 5 million acres from 2019.”
However, some fertilizer market analysts claim that the increased use of micronutrient fertilizers is connected to the expanding belief among farmers that the products work.
As Dale Edgington, the Procurement & Production Manager at Advanced Micronutrients Products, states, “The products are tried and true and meet the needs of most dealers and producers. Whether it is phosphate with zinc, potassium with magnesium, or boron with zinc, the soils, climate, crops, and farming practices are different from one end of North America to another.”
Certainly, CropLife readers are expecting the trend to continue, with an online survey from early March showing that 89% of voters anticipate micronutrient sales in 2020 to be greater than 2019.
Belief that is supported by further analysis predicting continued global expansion of the micronutrient sector. A recent Allied Market Research report stating that, “The global crop micronutrients market was valued at $6,077 million in 2017, and is projected to reach $11,532 million by 2025, registering a CAGR of 8.3% from 2018 to 2025.”
The report also highlighting the biggest growth in Asia-Pacific markets, with micronutrition of zinc outperforming other raw materials.
While the use of soil nutrition in microscopic form, such as boron, iron, zinc, and manganese, has been increasing steadily for many years, the continued boost to sales in the American market during such tough times is a sign of the product’s great potential.
Given that micronutrient market growth is being predicted despite a global economic downturn and with the US/China trade war yet to be concluded, evidence of increased use of micronutrients may be a sign not of a growing trend, but of a sea change in the fertilizer industry.
Photos by Tim Mossholder, Icon0, Lukas, from Pexels.