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Black Swan Event? Top US Fertilizer Producer Hit With Rail Delays To Midwest

Black Swan Event? Top US Fertilizer Producer Hit With Rail Delays To Midwest

A fertilizer supply shock is imminent for US farmers as CF Industries Holdings, Inc. warned Thursday that rail shipments of crop nutrients would be reduced to top agricultural states, which couldn’t come at the worst time as the Northern Hemisphere spring planting season is underway.

The world’s largest fertilizer company said Union Pacific had hit it with railroad-mandated shipping reductions that would impact nitrogen fertilizers such as urea and urea ammonium nitrate shipments to Iowa, Illinois, Kansas, Nebraska, Texas, and California. Union Pacific told CF Industries without advance notice to reduce the volume of private cars on its railroad immediately. This means CF Industries had to decrease shipments by a whopping 20% to stay compliant.

“The timing of this action by Union Pacific could not come at a worse time for farmers,” said Tony Will, president and chief executive officer of CF Industries.

“Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all. By placing this arbitrary restriction on just a handful of shippers, Union Pacific is jeopardizing farmers’ harvests and increasing the cost of food for consumers,” Will said. 

The move is particularly problematic for the Midwest, where 90% of corn and 80% of soybeans are produced in the US. The region is a critical node in the global food system, and tightening the fertilizer supply will only drive up food prices by shrinking harvests.

Farmers have been pressured by record-high fertilizer and diesel costs.

CF Industries released an ominous warning about the lack of fertilizer across the Midwest this year and how it may cause food supply woes: 

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The Nitrogen Bomb: fossil-fueled fertilizers keep billions of us alive

The Nitrogen Bomb: fossil-fueled fertilizers keep billions of us alive

Preface. There are two articles below that explain why natural gas fertilizers are keeping at least 4 billion of us alive today.  If you’re interested in this topic, here are a few more to read:

  • Erisman JW, Sutton MA, Galloway J, et al (2008) How a century of ammonia synthesis changed the world. Nature Geoscience.
  • Smil V (2004) Enriching the Earth: Fritz Haber, Carl Bosch, and the transformation of world food production. MIT Press.
  • Stewart WM, Dibb DW, Johnston AE, et al (2005) The contribution of commercial fertilizer nutrients to food production. Agronomy Journal 97: 1-6

We really ought to be transitioning to organic agriculture and composting to restore soil to it’s former health, which in turn protects plants from diseases, higher production, water retention, and more.  Since pesticides are also fossil fuel based (oil), and we’re running out of new ones just like we are antibiotics, there’s all the more reason to go organic before we’re forced to. It can take years for industrial farms to be restored to good soil ecosystem health.

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Fisher D (2011) The Nitrogen Bomb. By learning to draw fertilizer from a clear blue sky, chemists have fed the multitudes.  Discover magazine.

They’ve also unleashed a fury as threatening as atomic energy.

In 1898, Sir William Crookes called on science to save Europe from impending starvation. The world’s supply of wheat was produced mainly by the United States and Russia, Sir Crookes noted in his presidential address to the British Association for the Advancement of Science. As those countries’ populations grew, their own demands would outpace any increase in production. What then would happen to Europe? “It is the chemist who must come to the rescue of the threatened communities,” Crookes cried. “It is through the laboratory that starvation may ultimately be turned into plenty.”

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