U.S. Increasingly Imports Nitrogen and Potash Fertilizer

Nitrogen, phosphate, and potash are essential plant nutrients. U.S. farmers use about 21 million tons of these nutrients each year in the form of chemical fertilizers, helping to sustain high U.S. crop yields. But the sources of the nitrogen and potash have changed markedly in recent years from domestic to foreign suppliers, making the U.S. increasingly dependent on fertilizer imports.

Today the U.S. imports over half of the nitrogen and 80 percent of the potash fertilizer used on its farms. The picture is different for phosphate, most of which comes from domestic production.

The changing levels and sources of fertilizer, which can be analyzed through a new database on the ERS website, have implications both for farmers and fertilizer providers. Farmers have benefited from lower nitrogen and potash prices because of the imports. But the competition has caused some U.S. fertilizer plants to close down. Also, the fertilizer distribution system has changed to accommodate the increasing imports.

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. Imports of nitrogen—mainly from Trinidad and Tobago, Canada, and Russia, all with lower natural gas prices—quickly filled the gap.

The U.S. has long been a net importer of potash fertilizer. Domestic production of potash declined slightly in the late 1990s to less than 1 million tons per year, about one-fifth of domestic use. In the year ending June 2003, about 93 percent of potash imports came from Canada and 3 percent from Russia.

By contrast, the U.S. remains the world’s largest exporter of phosphate fertilizer. The U.S. exported about 5 million tons (about half of total production) in the 12 months ending June 2003. About 37 percent of phosphate exports went to China, with smaller amounts to Australia, Canada, Brazil, Mexico, and other countries. But exports have declined by 25 percent since 1997 as production increased in other countries. Domestic use of phosphate has remained steady at just under 5 million tons per year.