SIC 2874

This category includes establishments primarily engaged in manufacturing phosphatic fertilizer materials, or mixed fertilizers from phosphatic materials produced in the same establishment.

NAICS Code(s)

325312 (Phosphatic Fertilizer Manufacturing)

The U.S. Census Bureau estimated that 61 establishments manufactured phosphatic fertilizers in the late 1990s. In 2000 these companies shipped $4.2 billion worth of goods, spent $2.7 billion on materials, and employed 7,500 workers. About 62 percent of these establishments had at least 20 employees. The greatest number of phosphatic fertilizer operations was located in Florida and Louisiana.

Although the original sources of phosphorus for plant fertilization were guano (bird and bat excrement) and ground bone, a more plentiful source was found in phosphate rock, which was the only commercially important source of fertilizer phosphorus in the 1990s. The United States is the world's leading producer of phosphatic fertilizers. The Kola Peninsula in Russia is another primary source, and so is Morocco, which has phosphate rock deposits four times larger than those in the United States.

After mining, the phosphate rock must be refined and concentrated for use as fertilizer. Sometimes, finely ground phosphate rock is applied directly to soil, but usually sulfuric acid is used to convert it into a more water-soluble form.

About 45 percent of the phosphatic fertilizer produced in the United States is used on the domestic corn crop, so corn acreage is one determinant of domestic demand. Other determinants are grain prices, the ability of U.S. farmers to compete globally, and the weather. Short-term fluctuations in the domestic market are thus difficult to predict.

In the early 1990s the most widely used of the phosphatic fertilizers was diammonium phosphate (DAP). During 1991, about a fifth of the 10.7 million tons of DAP exported by the United States went to India, and nearly half went to China. Expecting a boom year for the industry in 1992, manufacturers increased their DAP inventories, but this contributed to an oversupply of the product as demand slumped in domestic and foreign markets. Prices fell to the lowest point in nearly 15 years.

From 1994 to 1995 phosphate fertilizer production increased 3.2 percent, exports increased 10.9 percent, and consumption increased 2.2 percent. Phosphatic fertilizer shipments peaked at $5.5 billion in 1998, when demand for phosphates was so strong that much of the inventory warehoused throughout North America was depleted. The price of two primary raw materials for DAP (ammonia and sulfur) was low, while the price of DAP was up until demand for the product dropped because of bad weather and the usual seasonal slowdown. Government financial aid to farmers and a growing demand for phosphates in China and India were two of the main reasons for the strong showing that year.

Nevertheless, some fertilizer manufacturers initiated significant cost-cutting measures. For example, in the late 1990s one of the world's largest producers of phosphate fertilizers, IMC Global Inc., began consolidating its phosphate and potash operations, a move that included the elimination of hundreds of jobs and the closure of several mines and processing plants. In addition, IMC Global formed a joint venture with two of its primary rivals, CF Industries Inc. (Long Grove, Illinois) and Cargill Fertilizer Inc. (Riverview, Florida), to open a sulfur remelting facility called Big Bend Transfer Co., LLC, in Tampa, Florida.

Phosphate fertilizer shipments declined to $4.9 billion in 1999 and dropped further to $4.2 billion in 2000. The cost of materials increased to $3.2 billion in 1999, before declining to $2.7 billion in 2000.

IMC Global subsidiary Freeport-McMoRan Resource Partners L.P. (New Orleans, Louisiana) was one of the leading companies in this industry with 1,000 employees and sales of $957 million in the late 1990s. Another subsidiary, IMC Kalium (Bannockburn, Illinois) had 2,500 employees and estimated sales of $600 million. A third subsidiary, IMC-Agrico Co. (Uncle Sam, Louisiana) had 650 employees and estimated sales of $184 million. It had previously been known as Agrico Chemical Co.

Among other industry leaders, Cargill had 1,354 employees and sales of $600 million. LESCO Inc. (Rocky River, Ohio) had 1,244 employees and sales of $417 million. Mobil Mining and Minerals Co. (a subsidiary of Mobile Corp. based in Pasadena, Texas) had sales of $161 million. Koch Agriculture Company Inc. Agri Service Div. (a subsidiary of Koch Industries Inc. based in Arapahoe, Nebraska) had sales of $150 million.

The Census Bureau reported that this industry employed 7,497 people in 2000, including 5,342 production workers who earned an average hourly wage of $20.20.

Further Reading

Brown, Robert. "Phosphate Fertilizers Await Spring as Demand Faces a Seasonal Slowdown." Chemical Market Reporter, 9 November 1998, p. 5.

Cargill Fertilizer Inc. corporate Web site. Available from .

Cristy, Matt. "Phosphate Treasure Draws Little Interest." Jacksonville Business Journal, 31 March 1997. Available from .

Darnay, Arsen J., ed. Manufacturing USA. 5th ed. Farmington Hills, MI: Gale Group, 1996.

IMC-Agrico Co. corporate Web site. Available from .

Johnson, Dexter. "Nitrogen Fertilizers Slump, Potash Rebounds." Chemical Market Reporter, 20 October 1997, p. 5.

Lazich, Robert S., ed. Market Share Reporter. Farmington Hills, MI: Gale Group, 1997.

LESCO Inc. corporate Web site. Available from .

Sunil, Saraf. "Potash and Gas Lead to Middle East." MEED Middle East Economic Digest, 10 January 1997, p. 16.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from .

U.S. Department of Commerce. Statistical Abstract of the United States. Washington, DC: GPO, 1996.

U.S. Department of Commerce. Census Bureau. 1996 Annual Survey of Manufactures. Washington, DC: GPO, 1998.

U.S. Department of Commerce. Census Bureau. 1997 Economic Census. Washington, DC: GPO, 1999. Available from .

U.S. Department of Labor. Employment, Hours, and Earnings, United States, 1988-96. Washington, DC: GPO, August 1996.

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