Fertilizer Manufacturing in the US Industry Market Research Report from IBISWorld Has Been Updated

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In 2009, demand for fertilizers declined due to farmers reducing their crop production and distributors cutting inventories; however, fertilizer prices, especially potash, are also expected to rise during the five years to 2019, which will boost revenue. For these reasons, industry research firm IBISWorld has updated a report on the Fertilizer Manufacturing industry in its growing industry report collection.

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Fluctuating demand from farmers is expected to smooth out stimulating growth during the outlook period.

Fertilizer is a natural or manufactured material containing at least 5.0% nitrogen, phosphorous or potassium. It is used in crops that produce food, feed, fiber and energy. Fertilizer is a commodity, meaning that the world market determines prices. In 2009, demand for fertilizers declined due to farmers reducing their crop production and distributors cutting inventories. In 2010, demand rose slightly, but it was still far behind prerecessionary highs. Furthermore, expansion in international trade heightened competition and hindered revenue growth in 2010. Over the five years to 2014, industry revenue is expected to increase at an average annual rate of 2.1%. However, revenue over this period has been very volatile, illustrated by an 18.5% decline in 2009 and a 13.7% rebound in 2011. According to major industry player The Mosaic Company, the 2012 Midwest drought, which was the worst since 1956, did not hinder fertilizer demand nor industry revenue. However, the sharp drop in potash prices, along with decreased prices for key crops beginning in 2013, caught many industry operators by surprise and resulted in revenue decreasing by 2.7% in 2013. This contraction is expected to continue in 2014, with revenue falling by 3.2% to $24.4 billion.

In the five years to 2019, revenue for the Fertilizer Manufacturing industry is expected to increase. According to IBISWorld Industry Analyst Omar Khedr, “Farmers will increasingly demand fertilizer as production picks up starting in 2016.” Fertilizer prices, especially potash, are also expected to rise during the outlook period, which will boost revenue. Moreover, exports are expected to grow over the next five years, further expanding industry revenue. At the same time, imports are anticipated to grow over the same period. According to the US Department of Agriculture, the United States is one of the top five fertilizer producers in the world for all major fertilizer nutrients (i.e. nitrogen, phosphorus and potassium). Behind China, the US is the second-largest producer and consumer of fertilizer in the world.

Manufacturers are also expected to pursue growth opportunities by building or expanding their current facilities. “Favorable energy costs between 2009 and 2012 stimulated the construction of new nitrogen fertilizer plants across the United States,” says Khedr. As a result of these trends, the number of establishments is expected to rise in the five years to 2019.

For more information, visit IBISWorld’s Fertilizer Manufacturing in the US industry report page.

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IBISWorld industry Report Key Topics

Operators in the Fertilizer Manufacturing industry primarily manufacture fertilizer products. These products contain a different mixture of the three vital nutrients essential for plant growth: nitrogen, phosphorous and potassium. The products are distributed via wholesale arrangements with third parties or, in the case of vertically integrated operations, by the manufacturer.

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Market Share Concentration
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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