The USDA has announced it will make $250 million in grants available to support domestic fertilizer production. The announcement comes amid soaring fertilizer prices and a high dependence on imports from an increasingly shaky global economy.
With a special focus on innovative, sustainable, and independent fertilizer production, the move could give smaller players a leg up in a market otherwise largely dominated by a select few. It could also mean a powerful boost for fertilizer production equipment and process development services.
The Need for Domestic Fertilizer Production
A growing global population, the pandemic, and the Russia-Ukraine conflict, among other factors, have culminated into fertilizer prices that have more than doubled in the past year. The trend has contributed to increasing pressure on farmers and added to already-rising food costs for consumers.
Currently, the US relies heavily on imports for all three of the primary nutrients used in fertilizer, putting the nation’s food supply at risk amidst rising global tensions.
The grant program will address long-term reliance on imports and help to ease nutrient input costs and reliability for American farmers by boosting domestic fertilizer production. It will also help to encourage a more competitive environment and bring additional jobs to the nation.
The USDA notes that increased domestic fertilizer production will also help in the effort to fight climate change by reducing the greenhouse gasses associated with the shipment of fertilizers.
In a press release, the USDA outlined their goals for the grant to support fertilizer production that is:
- Independent: Outside the industry’s current major producers
- Made in America: Produced by US companies within the nation’s borders
- Innovative: Aimed at improved fertilizer production and products
- Sustainable: Encourages sustainability in transportation, production, application, and more
- Farmer-focused: Supportive of US growers
The USDA plans to release additional details on the program, including the application process, this summer.
Along with the grant program, the government body is also taking aim at rising competitiveness concerns with a public inquiry that will facilitate the gathering of information on a variety of related topics, including seeds, agricultural inputs, and retail markets.
Fertilizer Innovation is Key
Not surprisingly, a key aspect of the grant program is focused on fostering innovative fertilizer production methods, as well as products.
Process Innovation
Optimizing efficiency at every point has become priority number one in every industry, fertilizer included. Producers have a number of options available to design highly efficient fertilizer production lines, as well as to improve upon their existing lines.
Producers can utilize coating drums to ensure efficiency in the production of coated fertilizers. The use of a coating drum over alternative technologies can reduce the amount of coating required and improve coating results, which contributes to a more efficient product.
Process audits can be another powerful tool in streamlining production and maximizing efficiency.
These are only a few of the many options available to producers.
Product Innovation
In addition to improving process efficiency and minimizing waste from the fertilizer production process, producers are also tasked, at least in part, with improving nutrient use efficiency and minimizing the potential for nutrient runoff.
The industry is also under increasing pressure to cultivate higher yields from smaller plots of land, a fact underscored by the USDA’s annual Farms and Land in Farms report. According to the data, the US lost 1.3 million acres of farmland in 2021
Helping farmers to maximize their ROI and the full nutrient value of inputs has also been a growing focus in securing a reliable and thriving food supply chain, as farmers operate on slimmer margins and the effects of nutrient runoff continue to rear devastating consequences.
As with the production side of things, numerous advancements have also been made when it comes to optimizing products. The production of specialty fertilizers aimed at more specialized crop nutrition, as well as enhanced efficiency and controlled- or slow-release rates, has become less of a novelty and more of an agricultural staple.
Much improvement has been made in bringing more efficient fertilizers to market and establishing guidelines to maximize nutrient use efficiency. Despite these improvements, however, there is still plenty of work to be done, and the grant program could be just the catalyst needed.
New Fertilizer Plant Builds on the Way
The grant program will undoubtedly help to remove critical barriers in the marketplace for smaller producers and those just starting out, a fact that will likely spur demand for development services and new production equipment.
In a market dominated by a select few, small fertilizer producers and those new to the industry often struggle to gain a foothold and establish competitive capacity.
“The US fertilizer industry was already seeing a lot of activity the past couple years,” comments FEECO Process Sales Engineer and fertilizer granulation expert, Shane Le Capitaine. “Unlike with producers that are already established, this grant program is going to create an environment where newcomers and smaller producers really have the chance to establish themselves and grow their operations. I expect we’ll see a surge in interest for new equipment and process development testing,” he adds. “That’s where our Innovation Center will be helpful.”
The Innovation Center is equipped to test a range of granulation processes from almost any type of feedstock. Producers can start with batch-scale testing and define basic process parameters and equipment configurations, moving on to pilot-scale testing on a continuous loop.
“We can really lay out and refine the whole process from start to finish,” Le Capitaine says. “Then we use that data to engineer and manufacture the equipment in the production line – granulators, mixers, disc pelletizers, dryers, coolers, and even coating drums – so buyers really know what they’re getting when they go through us.”
Conclusion
The USDA’s new grant program could be an important step in securing a more reliable and affordable source of nutrients for US growers. Beyond that, though, it will also bring new opportunities to the fertilizer industry, increasing competition and promoting a more innovative and sustainable industry. These changes are likely to increase the already-high demand for process development services and production equipment.
FEECO has been the leading producer of granulation equipment and process development services in the fertilizer industry since 1951. For more information on our custom equipment or testing equipment, contact us today!