Forever Growing Needs
As the world population keeps rising, our need for more food is increasing as well. We will need to significantly grow more food by 2050 if we are to avoid food deprivation.
Source: USDA
In addition, growing incomes in both rich and poor countries increase the demand for meat, which requires additional calories from crops like soybeans and corn. So, the pattern of growing consumption observed in the USA, China, or Brazil is likely to repeat with the several billion people living in Africa, India, SE-Asia, etc.
Source: USDA
None of the current food production, and even less higher production in the future, would be possible without fertilizer. In fact, half of the global population depends on fertilizers.
Source: Our World In Data
Since the onset of the “Green Revolution” in the mid-20th century, chemicals from pesticides and herbicides, but also plant nutrition (nitrogen, phosphate, potassium) have been vital in keeping production high enough.
As a result, the fertilizer industry can be seen as a very fundamental one and offers investors a stable sector in an increasingly unstable world.
The Science Of Fertilizers
The three main fertilizers are the so-called NPK fertilizers:
- N for nitrogen is produced by using a lot of energy to turn the atmospheric N2 into ammonia and nitrate.
- P for phosphorus, a resource that is mined from phosphorus-rich rock deposits.
- K for potassium (“kalium” in some languages), also mined.
Source: Fertilizers Europe
Besides the main NPK, other fertilizers contain secondary nutrients and micronutrients that plants need, but in small quantities, like calcium, sulfate, boron, zinc, molybdenum, iron, cobalt, and manganese.
The fertilizer market is massive, worth $208B in 2024, and expected to grow by 2.9% CAGR until 2034.
As we could expect due to its population, the Asia Pacific market is by far the largest, consuming half of the world’s fertilizers, followed by North America and Europe.
Source: Precedence Research
We can note that areas with large populations like Latin America (665 million people) and Africa & Middle East (1.3 billion people) make only a paltry 8% of global fertilizer consumption, illustrating how these regions might boost fertilizer consumption in the near future.
Source: Our World In Data
By far, the largest fertilizer producer is China, making up 25% of the world’s global, followed by Russia with 10%. Next are the USA, India, Canada, and Belarus.
When looking in more detail:
- Nitrogen production is dominated by China, India, USA, and Russia.
- Phosphorus production is dominated by China (>35%), USA, India, And Morocco.
- Potassium production is dominated by Canada, Russia, Belarus, and China.
Source: USDA
Looking at these supply sources, it becomes clear that when it comes to fertilizer, the dominant actors’ resources are almost all in Asia or North America. This can be a strategic concern for other regions.
Fertilizer prices have been fluctuating widely in the last few years, mostly as a result of geopolitical instability and the war in Ukraine, especially affecting nitrogen and potassium.
Source: World Bank
By far the most critical of the 3 forming the “NPK”, the pipeline for new ammonia production facilities is a little low in the upcoming years, which is likely to support prices in the upcoming years.
Source: Yara
You can also read more about the agriculture sector in “The Future Of Farming: Between High-Tech And Ecology”
Top 10 Fertilizer Companies
(When making this list, the intent is to illustrate the industry’s diversity beyond solely production volume, so large chemical producers will be presented alongside innovative companies in the industry, and green initiatives will be emphasized.)
1. Yara International (YAR.OL)
Yara is a global fertilizer company with 18,000 employees, ranking #1 in nitrate and #1 in NPK mixes.
Its ammonia production is mostly located in Europe and North America, with a focus on developing low-carbon ammonia production. It is doing so through using low-carbon energy sources and developing carbon capture. The company is also helping farmers store carbon in the soil through its participation in the Agoro Carbon Alliance.
Yara is also at the forefront of development for green ammonia, using renewable energy for ammonia production instead of the usual natural gas, and hoping it will be part of a future hydrogen economy.
Source: Yara
Better forms of nitrogen are also being tested, leading to an 83% nitrogen use efficiency in field tests compared to 64% in the average of the EU.
Lastly, the company is also active in creating digital tools to help farmers optimize their use of fertilizer and overall farm efficiency.
Source: Yara
2. Nutrien
Nutrien is one of the world’s largest fertilizer companies, with a strong distribution network in the entire Americas and Australia, making it the world’s largest agricultural retailer.
Source: Nutrien
Through this network, it sells not only fertilizers but also a lot of phytochemicals (pesticides, herbicides) and seeds, helping farmers pick Nutrien’s fertilizers on the same occasion.
Source: Nutrien
The company is also the world’s largest producer of potash (potassium) and the 3rd largest producer of nitrogen.
Due to the massive price differential between natural gas prices in North America and the rest of the world, Nutrien is looking to refocus on boosting its low-cost North American fertilizer production. To do so, it has consolidated more than 90 different sites into just five centralized locations.
Ideally, the company should boost its current 11Mt of nitrogen production in 2024, up from 10.4 in 2023, to 11.5-12 Mt by 2026.
It is also pursuing cost reduction through automation, with a target of increasing the amount of potash ore cut using automation from 2023’s 22% to 40%-50% by 2026.
Source: Nutrien
Overall, Nutrien seems more focused on low production costs than green initiatives, at least compared to its competitors.
The company is a major fertilizer producer in Canada, especially in the Saskatchewan province. This is the same region where BHP is pursuing a mega potash project (see below).
3. BHP
BHP Group Limited (BHP -0.88%)
BHP is first and foremost a global mining company, with the highest valuation in the world, mostly active in iron, copper, and metallurgical coal. BHP is now becoming active in fertilizers with an aggressive entry into the potash market.
Source: eToro
At some point in 2023, BHP was apparently interested in acquiring Nutrien, but this deal ultimately did not happen. It had since refocused its acquisition hunger toward Anglo-American, a producer of platinum, coal, and diverse metals, but this deal failed to happen as well.
Instead, BHP is developing a massive $10.6B potash mine in Saskatchewan called Jansen. The two stages of the Jansen project are expected to be ongoing to grow production until 2029, with additional stages 3 & 4 also considered.
Source: BHP
Jansen is expected to deliver 4.2 million tons of potash when the first phase starts production in 2026, adding 5% to the current global potash supply, sparking concern for the potash industry, especially Nutrien with its neighboring potash mines.
Overall, the Jansen project brings a lot of uncertainty to the potash market, after shortages from Belarus and Russia in 2022, and now potentially a surplus production in the upcoming years.
BHP is a good way to bet on potash market disruption while also having the security of diverse cash flow from other mining activities such as iron, copper, and coking coal.
4. CF Industries
CF Industries Holdings, Inc. (CF +0.52%)
CF Industries is a nitrogen-focused fertilizer company since the sale in 2014 of its phosphate business and multiple acquisitions of nitrogen production capacity in the 2010s, with a total production of approximately 10 million tons of ammonia annually, making it the world’s largest.
Its production facilities are mostly located in North America, which allows it to benefit greatly from the low cost of American natural gas compared to other regions.
It also gives it access to pipelines dedicated to ammonia transportation along the Mississippi Basin, helping the company to reach export markets through the harbors on the Gulf of Mexico.
Source: CF Industries
This could be very important for the company, as the price differential for ammonia between North America and other continents can be massive, creating a solid arbitration opportunity.
Source: CF Industries
CF Industries, like many of its competitors, is looking to reduce its carbon emissions. The company captures the CO2 normally emitted in ammonia production and reuses it to produce urea instead (another form of nitrogen fertilizer).
Source: Cf Industries
CF Industries is also active in green ammonia, with North America’s first commercial-scale green ammonia capacity in the Donaldsonville Complex in Louisiana, as well as carbon capture on the same site. It should be noted that Donaldsonville is the world’s largest ammonia production complex in the world, with a 4.3 Mt capacity.
5. The Mosaic Company
The Mosaic Company (MOS -0.59%)
Mosaic is another major producer of fertilizers in the Americas. Its North American mines are responsible for 73% and 40% of North America’s phosphate and potash annual production, respectively.
Source: Mosaic
Its South America business is mostly focused on Brazil, also producing potash and phosphate, with the recent addition of a 1Mt distribution facility in Palmeirante (north Brazil).
The company’s revenues are split between South American operations (41% of total revenues) and North America’s phosphate (35%) and potash (24%).
Source: Mosaic
The company strategy is one of moderate expansion, with a focus on returning capital to shareholders (almost all the free cash flow).
6. Gingko Bioworks
Ginkgo Bioworks Holdings, Inc. (DNA -13.14%)
Today, nitrogen is added to crops with chemical ammonia and nitrate made from natural gas, or renewable energy, in the case of green ammonia.
But there is another way to take atmospheric nitrogen into the ground: nitrogen-fixing bacteria.
In nature, these bacteria naturally partner with specific plants like beans, peanuts, or peas, that harbor them in little nodules, and get energy from the plant to add ammonia fertilizers to the nearby soil. This is why in traditional agriculture, crop rotation usually includes a leguminous plant, to add back some nitrogen into the soil after a cereal harvest.
Source: Legume Hub
Biotech companies are now looking to leverage this process to partially or entirely replace the need for chemical nitrogen.
Among the most promising is Gingko Bioworks, a “custom organism” company specializing in synthetic biology. It also has a large biosecurity segment, which was booming during the pandemic.
Ginkgo Bioworks has diversified in the last years its application range widely, with many research programs and partnerships:
It makes money by being first paid upfront for the development process and then through royalties on the finished product.
Gingko’s partnerships are constantly expanding, with:
Recently, Gingko has entered the fertilizer segment with a partnership with the startup OneOne Biosciences. The initial focus will be on nitrogen fixation, thanks to its massive potential market.
Users can insert OneOne Livepods™ into the Multiplier to aseptically prepare microbes, which can then be applied directly to crops.
Livepods are designed to come loaded with microbes that are tailored for specific-use cases — e.g. nitrogen fixation, phosphate solubilization, crop protection, drought resistance, carbon sequestration, and more.
It might take some time to reach the commercial stage, and even longer to become the dominant solution for nitrogen fertilization. But this would open to Gingko a $100B market, making it one more “moonshot” investment for the synthetic biology company.
7. Novonesis
Most fertilizer products are just adding the needed minerals to the soil. But for a variety of reasons, the plants are not always able to optimally intake these nutrients. Not only does this lead to waste and decreased productivity, but it also means the fertilizers often leach into the surface and groundwater, causing pollution. An alternative is biostimulants, which boost the availability of fertilizers and the overall plant health.
A leader in biostimulants, and biosolutions in general, is Novonesis, the result of the merger in 2024 of Chr. Hansen and Novozymes. It has products for most of the value chain in agriculture, from most of the main global crops to forage & farm animals.
Source: Novonesis
The company is not only active in fertilizer markets but also in food and health biosolutions. This includes the production of custom enzymes, microbes, functional proteins, and probiotics.
Source: Novonesis
Each of the segments of Novonesis activity focuses on reducing carbon emissions and overall pollution.
Source: Novonesis
While not solely a fertilizer company, Novonesis is an important company in building a more sustainable agriculture, as well as leveraging biosolutions to replace harmful and/or polluting chemicals.
Corteva, Inc. (CTVA -0.43%)
Corteva is a global leader in farming technology, especially chemicals and seeds. It is also very active in new farming technology like robotics and microbe-based fertilizers. With $17.2B in net sales in 2023, 22,500+ employees, and 10,000,000+ customers, the company is among the largest in its sector, together with out of the US competitors Bayer and Syngenta.
Overall, and maybe reflective of a deeper trend of reduced consumption and increased competition, the sales for chemicals (pesticides, herbicides, etc.) have been down in 2024, while seed sales grew.
In a deeper look, the core business of Corteva in seed is in corn and soybean, making up the bulk of the company revenue in this segment. Most notably, Corteva’s “Enlist E3” soybean, with resistance to 3 herbicides (2,4-D choline, glyphosate, and glufosinate), has grown from below 5% in 2019 to make up >65% of the US market.
Source: Corteva
In crop protection/chemical, more than half of the sales were for herbicides, with the rest mostly composed of insecticides and fungicides.
Source: Corteva
Corteva has built its current business around traditional industrial farming, which is still a very profitable activity that sustains the current R&D budget.
However, we are also looking forward to the future of farming, which we discussed in this article. Notably, Corteva has been working on:
Corteva is also actively looking into the future growing demand for green biofuels and specialty proteins, each with a $10B-$30B addressable market by 2035.
Source: Corteva
So overall, while Corteva is a giant of the “old” industrial farming methods, it is also clearly aware of the changes in the sector and positioning itself to become an equally large and successful company adapted to quickly changing agricultural practices, including biofertilizers.
9. UPL
UPL is a biostimulant and fertilizer company from India with a global presence, and a focus on natural solutions. Its main markets are Asia and the Americas.
This includes for example less nutrient losses with UPL Aeba soil & water technology or its set of products for each of the plant development stages.
Source: UPL
The company also includes a seed business, and a digital platform part of the India AgTech platforms.
While its international activity supports the expansion of the group, the Indian activities are still the core of the UPL Group. India is still a quickly developing agriculture market feeding 1.5 billion people and a still young and growing population.
This represents a solid growth market for the company, as it can expand in its home market with advanced biostimulant solutions looking to optimize the use of otherwise costly fertilizers.
10. ICL
ICL Group Ltd (ICL +1.98%)
ICL is a global specialty chemical company with activities ranging from chemical fertilizer (potash) to agriculture (specialty and organic fertilizer) and industry (bromine and phosphate compounds).
Source: ICL
Potash and “Growth Solutions” represent approximately half of the company’s revenues, and Americas and EU the bulk of the sales.
Source: ICL
ICL is investing in startups and doing its own R&D in next-generation fertilizers, including:
- Photocatalytic nitrogen fixation at proximity to the plant.
- On-farm electrochemical production of ammonia or nitrates.
- Biostimulants to improve fertilizers bioavailability.
- Improvement of phosphorus availability through plant extracts, microorganisms (PSB – Phosphorus Solubilizing Bacteria), and chemicals.
As a low-cost bromine and potash producer, the company is well-positioned to handle even low fertilizer prices, while betting on new innovative solutions to create growth in the future.
