Innovation

Innovation Can Bring Food Prices Back Down to Earth

In time, demand for poop and ash may offset the fertilizer crunch.

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If you're a compulsive doom-scroller (and who isn't, these days?) you probably have your eyes on rising food prices with the threat of further hikes to come. Supply-chain disruptions, pandemic lockdowns, and economic sanctions had the price of fertilizer soaring even before Russia invaded Ukraine, threatening grain exports as well as the availability of fertilizer for crops. It's an international headache that bodes poorly for budgets in wealthy countries and threatens hunger in poor ones. But price pressures may spur the development of soil-enriching products old and new that could, eventually, help offset expense while diversifying the marketplace in the future.

"From South America's avocado, corn and coffee farms to Southeast Asia's plantations of coconuts and oil palms, high fertilizer prices are weighing on farmers across the developing world, making it much costlier to cultivate and forcing many to cut back on production," The Wall Street Journal warned in January even before the horror show in Ukraine. "That means grocery bills could go up even more in 2022, following a year in which global food prices rose to decade highs."

Since then, troops from Russia, a major exporter of wheat, crossed into Ukraine, another important grower of grain, tightening the availability of food around the world in general, and especially in countries in Africa and the Middle East that traditionally rely on those sources. Prices rose 12.6 percent just in March, according to the UN Food and Agricultural Organization Food Price Index. Worse, Russia and Belarus are important exporters of fertilizer and of precursor chemicals for making the stuff, driving costs even higher for farmers around the world.

"In addition to being one of the largest producers of wheat, Russia has enormous resources in terms of nutrients," warns Svein Tore Holsether, president and CEO of fertilizer giant Yara International. "Plants need nitrogen, phosphate, and potash to grow.…In total, 25% of European supply of these three nutrients come from Russia" and Belarus supplies 20 percent of the world's potash.

But farmers grew crops long before the world relied on commercial fertilizers and international suppliers of precursor chemicals. Manure produced from animal feces was long a preferred means of enriching soil but was largely displaced for use in large-scale agriculture by more-consistent modern materials. Now, the literal waste product is being put back to its old use.

"Limited supplies and higher prices for commercial fertilizers have increased demand for manure," AgWeb reported last week. "In the past, some farmers have had trouble giving it away. Now they have crop farmers calling them, some of them having waiting lists."

The result of increased demand for manure has been, as you'd expect, higher prices. "Prices for good-quality solid manure in Nebraska alone have reached $11 to $14 per ton, up from a typical price of $5 to $8 per ton," Reuters notes. That could well bring more suppliers to the market for a product that, just recently, people were often paying to have removed.

But everything has its tradeoffs. Manure production takes time to ramp up, it's difficult to transport, and large quantities of animal waste pose potential contamination dangers to streams and groundwater. As a result, it's heavily regulated. "Livestock farmers say it's a heavy lift to meet all the government rules and track how manure is applied," Reuters adds.

The same considerations, cautions included, can apply to compost—decomposed organic material (especially when it includes the carcasses of, for example, millions of chickens culled because of an outbreak of avian flu). As with manure, demand for compost is rising. New Hampshire's WMUR notes "the rising costs of fertilizer and fuel are forcing many [farmers] to switch to manure and compost." 

Demand for compost may actually save some jurisdictions from their own good intentions. California, for example, now requires people and businesses across the state to separate food and other organic materials from inorganic garbage with the intention that it would be recycled for new uses such as compost. What the law couldn't do was create a market for rotting table scraps.

"The regulations don't require that the newly generated compost be used on farmland, include funding for costly transportation to farms, or mandate that compost be of a quality that would make it appealing to farmers and ranchers," Gosia Wozniacka observed in March for Civil Eats. Under the circumstances, "a jurisdiction could potentially pay for low quality compost and let it sit in an empty lot," she added.

Farmers are now looking for organic material to add to their fields, and suppliers will oblige them at the right price. Rising demand and resulting improved profit potential may accomplish what red tape can't in terms of creating an actual market for usable compost in the place of feel-good mandates.

But likely predating the use of manure and compost for enriching soil was slash-and-burn agriculture. While torching entire fields in order to enrich soil is frowned on these days, ash still improves crops through the use of biochar, a charcoal-like material that replaces slash-and burn. "Biochar is gaining attention as a sustainable product that may help decrease the need for fertilizers while also helping to reduce carbon emissions," Michigan State University researchers commented in 2020.

Intriguingly, one way to produce biochar is with woody material removed from public lands during the process of reducing the danger of wildfire. While forest-thinning usually consumes resources, biochar is a potentially profitable product that might help to make forest maintenance pay for itself in the process of benefiting agriculture.

"Black gold," Kraig Kidwell, regional timber contracting officer for the U.S. Forest Service told the Capital Press in 2020 of a demonstration biochar project in the Mt. Hood National Forest. "We're taking a waste product and creating something usable."

At the time, there was little demand for biochar because fertilizer was cheap. That has obviously since changed, and biochar, like manure, compost, and any other material that can replace or just reduce the need for expensive fertilizer looks a lot more attractive than in the past. In time, signaled by high fertilizer prices, the market will work to find substitutes and alternate sources.

But finding those substitutes won't happen immediately. Ultimately, innovation will bring new products and materials to market to enrich soil and feed the hungry. But, as has happened so often in the past, people will pay the toll for bad policy and military aggression until human ingenuity can step in to alleviate the suffering.

NEXT: Canceling Putin, Canceling Russians

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  1. Is it just a coincidence that just as demand is rising, Washington's politicians are preparing to ramp up their bi-annual production of bullshit?

    1. Hey JD..I have a better idea..end the Fed. End all monetization of govt debt, cut the federal govt by 50%. Inflation solved.

  2. "it's a heavy lift to meet all the government rules"....
    Because government LOVES monopolies....

    After-all it is the ONLY entity that can legally use GUNS to FORCE people to buy it's products or to GUN down it's competitors... And the excuses it makes for throwing GUNS behind the market are 99% ridiculous propaganda, lies and burglary....

    "The sky is falling down", screamed chicken little.
    "Shut down all the oil/coal", replied the Gov-Gun packing Nazi-Regime.

    Isn't it about time to STOP the ever growing Nazism taking over the USA??

  3. The best innovation would be free and fair elections where only eligible citizens vote, and only vote once. That would clear out the democrats and end inflation.

  4. All major oil refiners in the US were able to make gasoline that met EPA standards without using any ethanol. ADM and others lobbied hard for the ethanol requirement anyway, arguing that it would save energy. About 40% of the US corn crop goes into ethanol production for gasoline, probably with a net loss of energy anyway.
    Eliminate the ethanol requirement, keep the EPA clean air standard, and grow grain for food.

    1. ADM and others aren't giving up that sweet ethanol subsidy without a fight.

    2. It would be typical of government to burn 15% of the gas supply to create a 10% replacement all the while making sure the right people profit. (Numbers are made up for illustrative purpose, don't ask for a cite pendantic fucks).

    3. While I agree with the sentiment, this probably will not happen until the Iowa Presidential Caucuses are gone.

    4. Corn is the largest component of US fertilizer demand, and 35% of it goes towards the mandatory addition of 10% ethanol to US gasoline.

      I'm surprised the renewables subsidy solons haven't gotten around to a National Alcohol Stockpile

  5. "In time..."

    Not like THAT can be a problem.

    Malthus was both right and wrong. There are hard limits on growth.

    However, the MAIN limiting factor is, and probably always will be, political and not biological, environmental (weather/climate) or technical.

  6. "Prices for good-quality solid manure in Nebraska alone have reached $11 to $14 per ton, up from a typical price of $5 to $8 per ton,"

    Farmers should visit the Reason comments section, where the bullshit is free.

  7. But farmers grew crops long before the world relied on commercial fertilizers…

    Lots of people went hungry, too.

    1. And a LOT more people were full-time (not hobbyist) farmers.

    2. People still go hungry, and it does not seem to be the ability to grow food that is the problem. Many times, it is the distribution of food and political decisions about that distribution that hurts people.

      1. .. total agricultural output nearly tripled between 1948 and 2015—even as the amount of labor and land (two major inputs) used in farming declined by about 75 percent and 24 percent, respectively.

        Hunger was worse in the past.

        1. The left wants to create food shortages as a means to control the populace. It’s right out of Stalin’s playbook. So naturally the democrats want to limit access to food.

      2. Leftists have a problem feeding their people historically. Could you imagine if old Bernie Sanders was Pres and AOC in charge of the house and senate? "We are outa food..its the damn kulaks..opps I mean white protestant Trump lover farmers who are hoarding the corn"...not a stretch given the last two years

  8. Can we call it innovation when you happened to remember that your great grandpappy did it that way?

    Also, as Don't Look mentioned, the energy infusion from compost is a fraction of what we get from dino juice. I'm all for sustainable rotating agriculture, but let's be realistic about this; there ain't enough avocado peels and coffee grounds to compete with the chemical yields.

  9. America used to be the bread basket before we got fertilzer from Russia. what happened, globalization happened only to the detrement since now all nations get to suffer and be controlled by the all knowing intelectual class

    1. So the solution is central management via tariffs as to who gets what fertilizer from where? Hint: The intellectual class did not create globalization, it was Econ 101 and specialization. If you need a name to blame, then blame Adam Smith and David Ricardo.

      1. Next up; How the USA Armed Forces and having an actual National Border is of that very cursed word of "central management"...

        Never-mind you just pegged the two most important and only reasons the USA National Government was even created or exists and that those powers are SPECIFICALLY granted in the U.S. Constitution.

        Next you'll be telling us all how Taxing the living tar out of it's own citizens and creating the largest counterfeiting operation ever seen isn't a curse of UN-Constitutional Nazi-Regime Gangs or that cursed word "central management" but just "helping people"....

        In Conclusion; You leftards really do hate and want to destroy the USA and have it invaded and taken over by Nazi-Gangs.

      2. We still need to dispose of our leftists before they create a massive catastrophe and cause widespread starvation. The bottom line is that America just can’t afford to have democrats anymore. They have caused too much damage.

        1. One thing is certain; If they break the people's Supreme Law over them - they certainly have no business having a career in USA politics. They just need to be disposed of USA political power because their agenda is treasonous to the USA. The USA nation should NOT be welcoming in a foreign government; but that's exactly what they are doing.

      3. oh boy..don't go there. "Globalization" as it is today, is based on one thing..the US having the worlds reserve currency. This has led the US Govt to run massive deficits to buy votes and feed the various complexes (military, education, media, healthcare) but the only way to let the whole shell game to work was find a way to offshore inflation and China was ready and waiting. It isn't globalization in a classical sense that Riccardo or Smith would understand but debasement of a currency to keep elites fat and rich. Real globalism would be based on either a gold standard or bitcoin, countries could expand their money supply without increases in productivity. I'm all for globalism but with out govt's getting involved in trade in any way.

        1. It isn't globalization in a classical sense that Riccardo or Smith would understand but debasement of a currency to keep elites fat and rich.

          Another way of putting that is that Ricardo and Smith understood comparative advantage and free trade as an activity between participants in free markets. Neither the US nor China are free markets.

          Real globalism would be based on either a gold standard or bitcoin, countries could expand their money supply without increases in productivity.

          Even with Bitcoin, you'd be paying for the products of Chinese slave labor and finance a hostile, totalitarian regime.

          Comparative advantage only makes sense as a concept if all participants in the global trade system operate in free markets.

      4. Hint: The intellectual class did not create globalization, it was Econ 101 and specialization. If you need a name to blame, then blame Adam Smith and David Ricardo.

        The absurd global trade system we have has nothing to do with Smith, Ricardo, or Econ 101.

    2. America used to be the bread basket before we got fertilzer from Russia. what happened, globalization happened only to the detrement since now all nations get to suffer and be controlled by the all knowing intelectual class

      Something Reason has been fully on board with, using the standard globalist, pseudo-free-market arguments.

      But when global supply chains with totalitarian regimes predictably falter, Reason advises us that we can always go back to fertilizing with shit.

  10. Community composts for victory!!!

  11. ...and then regulations can bring the prices back up again.

  12. Would.

  13. Since when has that ever worked?

    1. I would like a closer look at her tits first.

  14. The article mentioned innovation. Then went on to talk about outdated means of production. Manure? Very expensive to ship due to its weight and volume. Fertilizers carry more nutrints per ton. They can be ordered to match soil test results. Manures are lacking in potassium. So, one still needs to buy fertilizer.

  15. Why would the government want to innovate for lower food prices, when their goal is to starve you into submission?

  16. But farmers grew crops long before the world relied on commercial fertilizers and international suppliers of precursor chemicals.

    Gosh, it's almost like there are substantial downsides to globally integrated supply chains and minimizing consumer prices by "free trade" with totalitarian regimes! Who would have thought?

    Not Reason obviously.

    1. ^THIS; Perfectly Stated +1000000

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