Input Stories

As the Iran war disrupts supply chains for many commodities, companies in the U.S. are responding to meet the demand. CF Industries, which safely produces industrial-scale ammonia and other nitrogen products, recently detailed its efforts to keep American farmers well supplied ahead of the growing season. 

The crunch: Nitrogen fertilizer production requires natural gas, from which hydrogen is synthesized with nitrogen from the air. The Middle East is a key supplier of natural gas and nitrogen fertilizer, but the Iran war has disrupted exports—causing a supply shock and raising global prices. 

• The Middle East produces approximately 30% of globally traded ammonia and approximately 35% of globally traded urea, the most widely used nitrogen fertilizers in the world. 
• Meanwhile, many nitrogen producers around the world, including in Europe, India, Pakistan and Bangladesh, rely on imported liquefied natural gas from the Middle East, which has also been disrupted.

Nitrogen fertilizers are globally traded commodities, much like the energy inputs required to produce them and the crops they feed.

Meeting the moment: CF Industries already runs its facilities 24/7 and at very close to its maximum capacity—averaging a gross ammonia utilization rate of 96% over the past five years—but it is taking a number of additional actions to increase the supply of fertilizer to support American farmers.

• The company has delayed a planned maintenance project at a Louisiana plant for a short while, allowing it “to supply approximately 100,000 additional tons of granular urea to U.S. customers that would not otherwise have been available for this spring application season.”
• Meanwhile, it is prioritizing new sales to U.S. buyers to keep more fertilizer available for domestic farmers.
• CF Industries has also expanded its urea rail shipping capacity, converting 100 ammonium nitrate hopper railcars so that they can transport granular urea.
• The company is examining its operations and distribution channels for further ways to increase production and distribution. 

More action needed: CF Industries praised the Trump administration’s moves to expand domestic transportation options for fertilizer, increase imports from Venezuela and use maritime reinsurance for ships carrying fertilizer from the Middle East. The company’s other recommendations include:

• Ensuring that trade with Canada continues without interruption, as Canada supplies a key portion of nitrogen fertilizer to the U.S.;
• Supporting LNG exports to Europe, India and other regions from other destinations to keep foreign nitrogen production from shutting down; and
• Allowing for greater flexibility for domestic transportation.