Fertilizer 101

What you need to know.

Fertilizer is the quiet foundation of the modern food system: it literally underwrites roughly half of global crop output and, by extension, the diets and livelihoods of billions of people. The world can debate vegetarianism, food waste and diet choices, but none of those change the basic arithmetic that more people, on finite land, require more yield per hectare – and those yields are overwhelmingly a story of Nitrogen (N), Phosphorus (P) and Potassium (K) and the energy and chemistry behind them.

It is my personal contention that not including fertiliser in the protections of the Geneva convention was a massive oversight that we are about to experience the serious consequences of. When the Geneva Conventions were signed in the late 1940s, the world had on the order of 2.5 billion people; today it is over 8 billion – more than a tripling of population without a tripling of arable land. Over that period, the difference between subsistence and surplus has been synthetic fertilizer. A systemic cut‑off of, say, half the world’s sulfuric acid production (that goes through the Strait of Hormuz) or a large fraction of ammonia output (30% goes through the Strait of Horuz) is not an abstract industrial shock; it will directly shape the growing seasons of the world’s breadbaskets, rice bowls and maize belts. The first‑order response – higher fertilizer prices – is simple supply and demand. The deeper story is that higher prices compress already thin farm margins, push weaker farmers out of business, and force both commercial and smallholder producers to under‑apply or stop applying nutrients. Yields fall, most sharply in the poorest regions; food prices rise; and, at the hard edge of the distribution, people go hungry. A market worth “only” a few hundred billion dollars turns out to be one of the most systemically important markets on earth. This seemingly minor disruption in global fertilizer input supply chains, is going to cause hundreds of millions of people to go hungry, and there is a significant risk that at the very bottom of the food chain, people are going to starve to death. Ignorance of the important role of fertilizer in the global economy has the ability to kill and harm more people than any war.

There are a number of dangerous misunderstanding regarding fertilizer. The first common misunderstanding is that “fertilizer” is ammonia/nitrogen. That’s understandable – ammonia is ~80% of total fertilizers and absorbs most of the energy input – but it is like thinking that carbohydrates alone make a diet. Nitrogen is the calorie‑dense staple, but phosphorus and potassium are the proteins and micronutrients of the soil diet: you need all three in balance, and you cannot simply pile on more N to compensate for missing P or K. Without phosphorus, roots and grain development stall; without potassium, plants lose water‑use efficiency and stress tolerance; and without nitrogen, biomass and protein never materialise. All three macro‑nutrients are co‑limiting: yields are constrained by whichever is scarcest, and the productivity gains attributed to “ammonia” actually rest on phosphate rock, potash and the sulfur chemistry that unlocks them.

The second misunderstanding is that “energy is fungible” in nitrogen production. Haber–Bosch is not a generic box that you can plug any random energy source into at scale. You need vast quantities of hydrogen at low cost and continuous operation. Today, natural gas is the most efficient way to provide both the hydrogen feedstock and the process energy, which is why gas price spikes translate almost linearly into more expensive nitrogen fertilizers. In principle, you can electrify hydrogen production and run green ammonia, but that requires cheap, reliable electricity at scales that barely exist outside a few regions, and the capital stock to match.

Haber–Bosch is the industrial magic trick that turns the nitrogen in the air into plant food. About 78% of the air is nitrogen gas, but in that form plants can’t use it; Haber–Bosch forces nitrogen from air to react with hydrogen (usually stripped from natural gas) at very high temperature and pressure to make ammonia, the starting point for most nitrogen fertilizers. That ammonia is then upgraded into nitrates and other nitrogen compounds that crops can actually absorb. Nitrogen is effectively limitless, but cheap nitrogen fertilizer is not: keeping nitrogen costs low has historically meant building multi‑billion‑dollar ammonia plants right next to large, reliable natural‑gas fields, because gas provides both the hydrogen and most of the energy. A modern world‑scale ammonia plant typically costs in the low single‑digit billions of dollars to build and takes several years from planning to production, so expanding capacity is always a slow, capital‑intensive process rather than something the world can do overnight.

A third misunderstanding is that sulfuric acid is just some interchangeable reagent you can swap out. Sulfuric acid is how we turn inert phosphate rock into plant‑available phosphoric acid, and the sulfur does not simply disappear: sulfur is itself a secondary nutrient, taken up by crops and essential for protein synthesis and oil content in many plants. Treating sulfuric acid as an expendable industrial chemical ignores its embedded role in the nutrient economy. A structurally constrained sulfur or sulfuric‑acid market chokes off phosphate availability and, in parallel, deprives crops of sulfur, which is already emerging as a limiting nutrient in some high‑input systems as atmospheric sulfur deposition falls.

Sulfuric acid is the unglamorous acid that quietly unlocks a big share of the world’s food. It is produced mainly by burning sulfur (much of it recovered from “sour” crude oil and natural gas that contain a lot of sulfur) or sulfur‑rich smelter off‑gases to make sulfur dioxide, then oxidising this to sulfur trioxide and absorbing it in water or existing acid – the classic contact process. That makes sulfuric acid a kind of by‑product of cleaning up fossil fuels and metal ores, not to be confused with heavy crude like Venezuelan or Canadian oil sands crudes, which are called “heavy” because their molecules are larger and more viscous, not simply because they are sulfur‑rich. A modern sulfuric acid plant can cost in the hundreds of millions of dollars for a modest unit and up towards a billion for large, integrated capacities, depending on scale and configuration. Globally, sulfuric acid is a mid‑teens‑billion‑dollar business – about 15–18 billion USD in 2024 by most estimates – and roughly 55–60% of all sulfuric acid is consumed in fertilizer production, mainly to turn phosphate rock into phosphoric acid for phosphate fertilizers. Another 10–20% goes into metal and mining uses such as leaching and ore processing, with the remainder spread across chemicals, batteries, refining and other industrial applications. In other words, a relatively small sulfuric‑acid market, largely fed by sulfur taken off sour fossil fuels, controls the availability of phosphate fertilizers that help feed billions.

Fourth there is the comforting illusion that “you can just apply fertilizer whenever.” You cannot. Crops have narrow windows when they can effectively take up N, P and K; miss those windows and the nutrients are lost to leaching, volatilisation or fixation, and the yield potential for that season is gone. Under‑application in one season also has memory: soils are mined of residual P and K; less biomass returns to the field; organic matter declines; and the next year’s crop starts from a lower fertility baseline even if you restore applications. Timing and continuity of fertilization are as important as absolute tonnage. In a world of 8‑plus billion people, those narrow windows, and the small set of chemicals that feed into them, have become one of the thin mineral lines between sufficiency and scarcity.

Last but least is the idea that we can simply swap synthetic fertilizer for “natural” options like manure and crop rotations is one of the most dangerous misconceptions in the entire food debate. It confuses what was barely enough to scrape by in a low‑yield, pre‑industrial world with what is needed to feed more than 8 billion people today. Manure, compost and rotations are valuable agronomic tools – they improve soil structure, recycle some nutrients and are essential for long‑term soil health – but they are not remotely abundant enough, or logistically scalable enough, to replace the billions of kilograms of nitrogen, phosphorus and potassium that modern cropping systems remove every year. Pre‑synthetic‑fertilizer agriculture was precisely the world that terrified Malthus: low yields, frequent crop failures and chronic vulnerability to hunger that plagued the world before the discovery of synthetic fertilizer, built on Haber–Bosch nitrogen, industrial phosphate and potash, broke that trap.

Globally, soils are still heavily nutrient‑deficient. Even with today’s fertilizer use, large areas of cropland lack adequate nitrogen, phosphorus, potassium and sulfur, which is why yield gaps between research plots and farmers’ fields remain so large in much of Africa and parts of Asia and Latin America. International assessments consistently find that raising yields where they are currently very low will require more, not less, nutrient input – especially nitrogen and phosphorus – alongside better management to reduce losses and environmental damage. FAO and other agencies repeatedly make the same basic point in different language: alleviating food poverty is, in practice, about alleviating “fertilizer poverty.” Hundreds of millions of smallholders still use little or no mineral fertilizer because it is too expensive, unavailable, or risky given their cash flow and climate exposure, and that is a major reason their yields are a fraction of agronomic potential. Closing those nutrient deficits with balanced, well‑timed N, P, K and sulfur applications is one of the fastest ways to raise local food availability and incomes.

For a planet of 8‑plus billion people, there is no credible route to ending food poverty that does not run straight through more and better fertilizer.

The value of the global fertilizer market

The global fertilizer complex is a few‑hundred‑billion‑dollar market that anchors a multi‑trillion‑dollar food economy, and shocks to its key sub‑markets (N, P, K, sulfuric acid and natural gas) hit global inflation and the poorest households hardest.

Recent industry estimates put the global fertilizer market around 200–230 billion USD in the mid‑2020s.

Nitrogenous fertilizers: About 128 billion USD in 2024 (urea, ammonium nitrate, UAN etc.), roughly 55–60% of total fertilizer value.

Phosphate fertilizers: Around 73 billion USD in 2024, with projections to about 120 billion USD by 2033.

Potash fertilizers: About 22 billion USD in 2024, expected to rise to roughly 32 billion USD by 2034.

By nutrient tonnage, nitrogen accounts for about 57–58% of global fertilizer consumption, phosphate about 23%, and potash about 18%, which aligns with the value shares above.

Key upstream enablers: sulfuric acid and natural gas

Sulfuric acid: The global sulfuric acid market was about 23.2 billion USD in 2024, with a major share of demand coming from phosphate fertilizer production.

Natural gas: Gas is the main feedstock and energy source for ammonia; it typically accounts for 72–85% of the variable cost of ammonia production, so gas price spikes map almost directly into nitrogen fertilizer prices.

Ammonia itself (much of it going into fertilizers) is a large chemicals market in its own right, “tens of billions of dollars’ worth of natural gas and over 20 billion dollars of sulfuric acid are transformed into nitrogen and phosphate fertilizers that unlock around 200‑plus billion dollars of fertilizer products each year.”

The downstream markets those inputs support

FAO and World Bank data put the gross value of global primary agricultural production at just over 5 trillion USD per year, with agriculture value added around 3.2 trillion USD. The broader food system (processing, distribution, retail and food services) is estimated to generate between 2 and 5 times as much value as farm production itself, pushing the total food‑system economy into the low‑ to mid‑tens of trillions of dollars.

In other words: A roughly 200–230 billion USD fertilizer industry, supported by about 23 billion USD in sulfuric acid and a large but still modest slice of the natural‑gas sector, helps underpin:

~5 trillion USD of primary agricultural output.

A multi‑trillion‑dollar global food system when you add processing, logistics and retail.

Mineral fertilizers are widely credited with enabling about 50% of global crop production. That means “half” of that 5‑trillion‑dollar farm economy – on the order of 2–3 trillion USD – and half of the global food industry – 10-25 trillion USD - is functionally contingent on the continued availability of NPK, sulfuric acid and cheap hydrogen from natural gas.

Fertilizer, CPI and inflation

Food is a major component of consumer price indices (CPI): In many middle‑ and high‑income countries, food typically accounts for 10–30% of the CPI basket. In low‑income countries, food can easily represent 40% or more of household consumption and thus of CPI weights.

When fertilizer prices surge: First‑round effect: Farm production costs jump because nitrogen, phosphate and potash become more expensive. FAO’s 2025 fertilizer market update, for example, reports that an average fertilizer “basket” was about 336 USD/tonne in 2024, down from 375 USD/tonne in 2023 but still well above pre‑crisis levels, underlining how elevated prices squeeze margins. Second‑round effect: Many farmers, especially in emerging and low‑income regions, respond by cutting application rates or skipping some nutrients, which depresses yields, particularly for cereals and other fertilizer‑responsive crops.

Higher costs per tonne plus fewer tonnes mean higher farm‑gate prices, which feed through to higher food prices and, given food’s heavy weight in CPI, to broader inflation. These dynamics are why fertilizer shortages and price spikes are often visible in global food price indices and headline inflation data.

The poorest consumers get hurt the most. FAO’s State of Food Security and Nutrition in the World 2024 reports that over 2.8 billion people cannot afford a healthy diet at current food prices, with about 71.5% of the population in low‑income countries unable to afford such diets. These populations cluster heavily in the bottom end of the global income distribution, where food often takes up half or more of household spending. In that context, any fertilizer‑driven food price increase hits the poorest households disproportionately, because they spend such a large share of income on food and have almost no cushion.

The very poorest – those already near or below subsistence diets – are forced to reduce food quantity and quality when prices rise, which translates directly into more hunger and malnutrition, and in the very worst case scenarios, starvation.

All this to say a 200‑odd‑billion‑dollar fertilizer market, underpinned by a 23‑billion‑dollar sulfuric acid sector and cheap natural gas, quietly stabilises trillions of dollars of food‑system value and is a first‑order determinant of global inflation and of whether the 2‑plus billion people who already struggle to afford a healthy diet see their situation improve or deteriorate.”

In the long run, the economic shockwaves run upward from just five primary mineral inputs – hydrocarbons, sulfur, phosphate rock, nitrogen (via air and hydrogen) and potash – and the roughly 200–250 billion‑dollar fertilizer market they enable. Those inputs sit at the base of global yield levels, food prices and, by extension, headline inflation: squeeze them, and the effects propagate from fields to food indices to monetary policy. Before the Green Revolution and widespread synthetic fertilizer use, the world was not “fertilizer rich”; yields were tightly constrained by natural soil fertility, and hunger was far more widespread. Even today, potash appears on many critical‑mineral lists precisely because losing it would cripple the nutrient balance of major crops, and FAO country diagnostics repeatedly show that alleviating food poverty is, in practice, about alleviating “fertilizer poverty” – getting affordable N, P and K, plus sulfur, to worlds poorest farmers who currently use almost none. If there is a single, clearest “mineral imperative” in the world economy, it is this: secure flows of these basic, unfashionable minerals and molecules are a precondition for stable food systems, manageable inflation and any serious attempt to end global hunger.