Did you ever think youd see diammonium phosphate fertilizer (DAP) selling for more than $1,000 a metric ton?
Never. This is absolutely unseen in my generation. And it came about very quickly. Is it a bubble? We’ve seen spikes in grain prices before, but those were supply-driven, caused by floods in Mississippi or droughts in Canada. This is demand-driven by an increase in consumption the world over. I think we’ve hit a tipping point because while we have very steady population growth, at the same time we’re having strong world economic growth. Though there may be a slowdown in the U.S., the economy is strong in areas of the world like Asia and South America with the greatest population growth. And at $4,000 to $5,000 per capita annual income, people look to improve their diets. That translates to demand for more grain. The world’s inventory is also dangerously low. We’re emptying the cupboard. So when grain prices rise, farmers plant more acres and want more productivity, increasing the demand for fertilizer? Farmers, of every size, can’t afford not to maximize their production. Their costs a
