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A Short History and Production Statistics
of the Fertilizer Industry for Railfans

Corn is the most important crop for U.S. fertilizer application and changes in corn plantings are the main driver for U.S. fertilizer demand. Wheat is the second most important crop, especially for nitrogen and phosphates, but less important for potash. Soybean plantings are of low importance for nitrogen application but more important for phosphates and potash.

Ammonia is produced at about 40 plants in the U.S. and 10 in Canada. There is a heavy concentration of plants in Louisiana, Oklahoma and Alberta. Total North American ammonia capacity is 22.5 million tons. North American capacity has been declining due to higher natural gas prices and plant closures. Ammonia is produced for fertilizer and industrial uses. About two-thirds is upgraded into urea (used in fertilizers and water treatment), nitric acid (used in fertilizers, synthetic fibers, plastics and metal treatments) and ammonium nitrate (used in mining). Nitrogen´┐Żs uses range from fertilizer to carpets to car tires. The US used 12 million tons of nitrogen (ammonia based) fertilizers in 2002.

Since natural gas is a basic component in the production of ammonia, the rise in natural gas prices from 2000 to 2006 caused a 44 percent reduction in US ammonia production. Imports of ammonia increased over this same period by 115 percent. Farmers who paid $227 per ton in 2000 were paying $521 per ton in 2006, an increase of 130 percent.

Anhydrous Ammonia
A major advance in the technology of ammonia production occurred in the early 1960s when the M.W. Kellogg Company introduced the jumbo-size, single train, centrifugal compressor ammonia plants. Ammonia could be produced in these large efficient plants at one-half the cost of smaller plants equipped with the conventional reciprocal compressors. The number of new plants based on this advanced technology grew rapidly from one in 1963 to 10 in 1967, 28 in 1969, 38 in 1971, 39 in 1976, and 43 by 1980. Ammonia production capacity of the new plants in 1980 totaled 14.7 million tons/year or 71 percent of total U.S. ammonia capacity.

Ammonium Nitrate
In the 1970s ammonium nitrate was produced at 29 locations separate from ammonia plant sites. Production of solid and solution ammonium nitrate fertilizer increased continuously from 383,000 tons in 1943 to 7.3 million tons in 1980. Ammonium nitrate accounted for about one-third of all the nitrogen applied directly to U.S. cropland in 1955. By 1980, this use had declined to 10 percent. The tonnage of directly applied nitrogen as ammonium nitrate was exceeded by anhydrous ammonia in 1960, by nitrogen solutions in 1970 and by urea in 1978. Ammonium nitrate supplied 5.3 percent of the total 12.6 million tons of nitrogen consumed nationally in 1994.

Phosphatic Fertilizers
Ammonium phosphates, which are now the dominant phosphate sources worldwide, were first produced commercially in the U.S. in 1916. The very popular and dependable TVA process for granular diammonium phosphate (DAP) was introduced in 1961 and by 1967 it became the principal phosphate fertilizer in the U.S. Nineteen plants utilizing this technology with a combined capacity of 2 to 3 million tons of product annually were installed in 1962. Two years later there were 31 such plants. By 1974, DAP became the most widely used phosphate fertilizer worldwide. Mono- and diammonium phosphate accounted for about 60 percent of global fertilizer phosphate production in 1981. Di- and monoammonium phosphates supplied 38.8 and 14.3 percent, respectively of U.S. phosphate usage in 1994. The US used about 4.5 million tons of phosphate fertilizers in 2002.

In 2003, there are 17 phosphoric acid plants in the U.S. and one in Canada. Total U.S. capacity is estimated at 13.3 million tons. Most of the plants are located near phosphate rock mines in Florida, North Carolina, Wyoming and Idaho. Florida has about 63% of the total phosphate rock. IMC has the largest rock capacity in the U.S. at 17.9 million tons at four mines in Florida. Cargill has the second largest capacity with three rock mines in Florida at 11 million tons.

Potash Production And Consumption In The United States
The potassium fertilizer industry originated in Western Europe. During the World War I years of 1914 to 1918, a wide variety of potash sources were utilized including brines from Searles Lake, California; alunite (a potassium aluminum sulfate mineral) from Utah; brines from lakes in Western Nebraska; salty waters from Great Salt Lake; dust from cement kilns; wastes from distilleries and sugar refineries; kelp harvested off the shores of California. By 1966, seven potash mines in New Mexico and one in Utah were being operated. Potassium fertilizers were also being produced from the Searles Lake brines by two companies and by one other operation at the Salduro Marsh in Utah. Domestic production reached an all-time high in 1966 and it has declined steadily since that time. This reduction was due to two important factors including the quality and competitiveness of the New Mexico ores and the impact of the newly established Canadian potash industry.

In the mid-1990s, the centers of potash fertilizer production were located in New Mexico, Utah, California and Michigan. Approximately 80 percent of the total production capacity existed in New Mexico. U.S. consumption of potash has grown significantly from 2.15 million tons of K2O in 1960 and reached a maximum of 6.32 million tons of K2O in 1981. In the first four years of the 1990s, usage has ranged between 5.00 and 5.27 (in 1994) million tons of K2O. US production of potash declined slightly in the late 1990s to less than 1 million tons per year, about one-fifth of domestic use. In 2003, about 93 percent of potash imports came from Canada and 3 percent from Russia. The US used almost five million tons of potash fertilizers in 2002.

MCC (Mississippi Chemical Corporation) produces both red and white potash from two mines and associated refining facilities near Carlsbad, NM. MCC produced 811,000 tons in 2001. Most of the red and approximately half of the white standard potash is converted to a granular product which is used as a direct application fertilizer and in bulk blending of agricultural products. The balance of the white product is consumed in the specialty and industrial markets.

IMC has four potash mines in Saskatchewan and a shaft mine in New Mexico and a solution mine in Michigan.

Total North American potash capacity is 16.0 million short tons. The U.S. is the largest consumer of potash in the world at 5.6 million tons. China is the second-largest consumer of potash at 3.8 million tons. Canada is the world's largest potash exporter at 8.1 million tons in 2002.

Nitrogen Fertilizer
The U.S. went from being the world's largest exporter of nitrogen fertilizer in the 1980s to becoming the largest importer in the 1990s. Domestic production of nitrogen fertilizer declined during the 1990s as the price of domestic natural gas (the primary source of nitrogen) increased because of demand for natural gas in the U.S. expanding faster than production.

2003 capacity in thousands of tons

ammonia DAP Potash
IMC Global 560 3,677 6,317
PCS 2,289 1,149 7,518
Agrium4,116 520 1,179
CF Indust 2,200 1,100
Koch Nitro 3,234
Cargill 324 2,728
Terra Ind 3,015
MS Chemical 1,661 414 665
Simplot 430 243

The PSC Geismar plant is located 15 miles south of Baton Rouge. The complex covers more than 500 acres. It contains both nitrogen and phosphate production areas, and has a capacity of 541,000 tons of ammonia, 910,000 tons of nitric acid, 1,133,000 tons of nitrogen solutions and 223,000 tons of phosphoric acid.

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