United States Fertilizer Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The US fertilizers market is projected to record a CAGR of 1.7% during the forecast period (2022-2027).

The COVID-19 pandemic has affected all the supply chains that connect farm production to final consumers in the United States. Farmers have faced a shortage of agricultural inputs, including fertilizers. As China is one of the major producers and exporters of nitrogenous fertilizers to the United States, when China imposed a lockdown, there was a huge fertilizer shortage in the country due to problems with transportation. Prices hit an all-time low due to trade pressures and regulatory challenges.

The key drivers for this market include increasing export potential for nitrogen-based fertilizer, rising population and limited arable land in the United States, and increasing technological innovations by the major players operating in the market. The application of nitrogen fertilizer is proportional to cereal yields.

According to the US Department of Agriculture, the country has expanded the farmlands to plant 94 million acres of corn and 85 million acres of soybeans, resulting in greater consumption of nitrogenous fertilizers in 2021 and supporting the domestic crop production in the country. Thus, with the increasing demand for nitrogen fertilizers, the United States has increased its export potential, and it is anticipated to become a globally important exporter of nitrogen products in the coming years.

Key Market Trends

Rising Population and Decreasing Arable Land

The US population is increasing at a rapid rate, with 330 million in 2020. This growing population is adding to the food demand. Hence, there is a need to increase agriculture productivity in order to supply food to the growing population. ​According to the World Bank, arable land (percentage of land area) in the United States was around 17.24% of the total land in 2018. Furthermore, there is little scope for arable land expansion in the coming years. ​

According to the USDA, since 1996, the amount of land used for crop production has been relatively stable, ranging between 314 and 328 million acres. The limited arable land area indicates the need to increase agricultural productivity with the use of agri-inputs. Fertilizers have been used for a long time to increase the productivity of crops. The four major crops in the United States include corn, cotton, soybeans, and wheat, which account for more than 60% of the principal crop acreage and receive over 60% of the nitrogen (N), phosphate (P), and potash (K) used in the United States.

The higher demand for phosphate and potash fertilizers is attributed to the increased consumption of fruits and vegetables in the past decade in the country. Nitrogen fertilizers have the largest share in the US fertilizers market due to the production of cereals, such as corn and wheat, in the country. Thus, the rising population and limited arable land in the United States have led to higher dependence on fertilizers to meet the growing demand in the country.

Increasing Export Potential for Nitrogen-based Fertilizers

The application of nitrogen fertilizer is proportional to cereal yields. According to the US Department of Agriculture, the country has expanded the farmlands to plant 94 million acres of corn and 85 million acres of soybeans, which will result in greater consumption of nitrogenous fertilizers in 2021, supporting the domestic crop production in the country. ​

According to the International Fertilizer Association (IFA), the global demand for urea is expected to increase at 1.6% per annum, to reach 188 million metric ton by 2022, while the supply (effective capacity) may reach 197 million metric ton. The United States, which is one of the world’s largest importers of nitrogen fertilizers, has developed into one of the most promising nitrogen investment destinations.

According to the ITC trade, the export quantity of urea increased during 2016-2019 in the country. The country’s urea export, which was recorded as 321 thousand metric ton in 2016, reached 872 thousand metric ton in 2017. However, the annual growth in export quantity decreased to 13% during 2018-2019, which was recorded at around 769 thousand metric ton in 2018 and 575 thousand metric ton in 2019. The low export quantity may be attributed to the lower demand from the major importing countries. However, it increased in 2020 to 827.3 thousand metric ton. Thus, with the increasing demand for nitrogen fertilizers, the United States has increased its export potential, and it is anticipated to become a globally important exporter of nitrogen products in the coming years.

Competitive Landscape

The fertilizer market is consolidated, with major companies accounting for the majority of the market. Some of the players operating in the market are ICL, NutrienLimited, Mosaic Company, Yara International ASA, and SQM SA. These companies are focusing on R&D, product launches, and innovations and partnerships.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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