Another day, another agri-business giant reporting extraordinary profits, built on the back of the U.S. taxpayer and made at the expense of the environment.
Yesterday, it was Monsanto, the genetically modified seed and pesticide giant. Today, it is the world's largest phosphate producer, Mosaic, according to Investor's Business Daily. The fertilizer maker celebrated 439% earnings growth. Yes, its profit more than quadrupled, and it's the third straight quarter of triple-digit growth. (Tomorrow, it may be chemical giant DuPont, which raised its 2008 profit forecast Wednesday on the strength of its agribusiness chemical business, according to Investor's Business Daily.)
The fossil fertilizer industry, like the fossil fuels industry, is fueling environmental problems of global proportions, as its profits soar.
The economic background for the extraordinary profits are, by now, well known. Congress demands new ethanol production. Farmers plant more corn, using more pesticides and fertilizers in the process. And the environmental consequences, too, are well known. Excess fertilizer runs off into streams, which flow into rivers, which spill out into the ocean. Algae proliferates, consuming vast quantities of oxygen. Other species die, or move away from the growing "dead zone."
Scientists have identified more than 400 of these dead zones around the world, and many more are believed to be undocumented.
Phosphates and nitrogen are needed by plants to grow, but the mining of phosphate rock (marine fossils) for phosphorus-rich fertilizer, and the processing of natural gas into nitrogen-rich fertilizer, are examples of modern society's overreliance on finite natural resources. Like carbon, both are extracted from fossil sources made millions of years ago; they are then spread across the landscape, altering the cycles that naturally regulate the distribution of the essential nutrients on earth.
Phosphate mining is a concentrated industry, with just six U.S. companies operating 12 mines in four states Florida, North Carolina, primarily, with Idaho and Utah contributing less. Those six companies raked in $852 million-worth of phosphate 30.7 million tons in 2006, according to the latest U.S. Geological Survey statistics. Virtually all of that rock 95% goes into the manufacturing of fertilizer. Morocco supplies virtually all the phosphate used in the U.S. that isn't mined domestically, and the U.S. uses, consumes and supplies more phosphate than any other nation on earth.
But as with so many other things, China is becoming a major player. U.S. phosphate production dropped to 40-year lows and looks to continue that trajectory, according to the USGS, as we exhaust mines and China competes more effectively. China has more phosphate reserves than any other nation, with Morocco, South Africa and the U.S. following behind.
These reserves will continue to be tapped, the fertilizers processed and the nutrients spread across the landscape, particularly if industrialized farms continue to benefit from subsidies for ethanol, which when made from corn consumes nearly as much energy as it produces, as it contributes to damaging water pollution. But corn prices are up 30% from a year ago, according to Investor's Business Daily (soybeans, another heavy user of fertilizer, are up more than 50%).
As long as fertilizers help farmers squeeze more corn out of an acre 150 bushels today, versus 80 in 1970 and crop prices stay high with the help of government subsidies, the cycle of overconsumption and pollution is likely to continue. If, however, advances are made in the processing of switchgrass or other high-yield crops that need no pesticides or fertilizers, ethanol could replace gasoline without increasing pollution or reliance on fossil fertilizers.
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