This category includes establishments primarily engaged in manufacturing nitrogenous fertilizer materials or mixed fertilizers from nitrogenous materials produced in the same establishment.
325311 (Nitrogenous Fertilizer Manufacturing)
The number of establishments producing nitrogenous fertilizers declined from 166 in the early 1990s to 143 in the late 1990s. Industry shipments declined from $3.9 billion in 1997 to $2.6 billion in 1999, before rebounding slightly to $$3.0 billion in 2000. The cost of materials was $2.1 billion in 2000.
Employment fell from 8,000 in 1994 to about 6,300 in 1996 and 5,252 in 2000. The industry's 3,250 production workers earned an average hourly wage of $22.76 in 2000. Nearly 40 percent of the establishments in this category had at least 20 employees. The largest concentration of establishments was in California, followed by Florida, Missouri, Arkansas, and Iowa.
The main source of nitrogen for fertilizer production is atmospheric nitrogen, of which there is abundant supply; it has been estimated that there are about 35,000 tons of nitrogen over every acre of land. For plants to utilize this element, however, it must first be combined with either oxygen or hydrogen in a process called "fixation."
The primary ingredient of most nitrogenous fertilizers is anhydrous ammonia, which the fertilizer industry typically forms by fixing atmospheric nitrogen with the hydrogen found in the natural gas methane. The resultant compound is a gas that is 82.25 percent nitrogen. This gas is stored in containers that are pressurized and usually refrigerated. It may be injected beneath the soil surface as a fertilizer. In 1992 natural gas prices shot upwards and accounted for 70 percent to 85 percent of ammonia production costs. This put the United States at a cost disadvantage compared to countries such as Russia, Canada, and Mexico, which have abundant and lower-priced sources of natural gas.
Anhydrous ammonia may be combined with nitric acid to produce ammonium nitrate, an excellent fertilizer that is highly combustible. A third type of fertilizer, urea, can be made by combining anhydrous ammonia with carbon dioxide. Urea has a higher nitrogen content and is easier and safer to store and handle than ammonium nitrate. Some nitrogenous fertilizer materials are made from organic substances such as sewage sludge.
The U.S. Census Bureau estimated that in 1997, the industry shipped $4.4 billion worth of synthetic ammonia, nitric acid, and ammonium compounds, up from $3.6 billion in 1992. Shipments of urea totaled $785 million, up from $709 million in 1992. Shipments of nitrogenous fertilizer materials of organic origin totaled $70 million, down from $155 million in 1992.
Demand for urea and other nitrogen-based fertilizers was strong during the mid-1990s, but in the late 1990s the industry floundered when China withdrew from the market. In an attempt to curtail imports and support its own domestic production, China imposed an import tax on urea, which substantially increased the product's price there. The resulting oversupply caused the price of urea to slump in other countries. Along the Gulf of Mexico, the domestic delivery point for the raw commodity, the price dropped from $191 per ton to $110 per ton in just 10 months. As manufacturers reduced their production of urea and began making more ammonia instead, the price of ammonia also dropped. Conditions were not expected to improve until China began buying nitrogenous fertilizers again.
Meanwhile, one of the largest U.S. producers of nitrogen fertilizer was acquired by a Canadian company that made potash fertilizer. Arcadian Corp. (Memphis, Tennessee) merged with Potash Corporation of Saskatchewan Inc. in the spring of 1997 to form PCS Nitrogen Inc. In the late 1990s Potash Corporation had sales of $2.3 billion, and Arcadia had sales of $1.1 billion.
Other leaders in this category included Terra Industries Inc. (Sioux City, Iowa) with sales of $2.5 billion; CF Industries Inc. (Long Grove, Illinois) with sales of $1.2 billion; Pursell (Los Angeles, California) with estimated sales of $1.2 billion; and Scotts Co. (Marysville, Ohio) with sales of $1.1 billion.
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