Who Benefits the Most from Modern Ag?

Attitude of Gratitude

Every living creature on this planet eats because it takes energy and raw materials to grow, maintain and reproduce themselves. Humans are no exception, but the way in which we feed ourselves is a massive exception. No other species on the planet has figured out a food system quite like ours. Yes, plants technically “farm” microbes near their roots and some ants “farm” fungi in underground cities, but nothing compares to the season-defying, intercontinental food system that most humans enjoy today. The ability for the world to produce the quantity of food that it does and transport it thousands of miles before spoiling is truly a modern marvel of science and engineering. Most people, especially those of us in the developed world, should have some sense of gratitude for the abundance produced by this behemoth food system. After all, we live in an unprecedented time in human history in which so few people ever wonder where their next meal is coming from. That’s something to be thankful for. And yet, serious questions exist concerning the ethics and sustainability of the current agricultural system.

 

The inconvenient truth is that producing, distributing and preparing food is big business, and schemers always appear wherever large quantities of money are to be had. This has certainly been true in other areas of the economy, like in the energy sector and the financial sector, so why would we expect the food sector to be any different? Maybe it’s because we all want our food coming from smiling farmers hand-delivering fresh vegetables, meat and dairy to their local communities. Or, thinking more broadly, it’s because feeding the world is an inherently altruistic endeavor. It makes sense, then, that individuals working in the space would be in it for the right reasons, right? There’s no doubt a large percentage of people working in the food sector do it for altruistic reasons, but it would be naive, and incorrect, to think that the current food system was designed, and is currently run, absent of schemers seeking personal gain from a basic human necessity. That’s a big claim that deserves big evidence. This article’s purpose is to provide such evidence by investigating how the industrialization of agriculture in the past couple centuries has affected various aspects within the modern food system. Namely, we will look at how the agricultural input industry, the producers and their communities, industries after the farm gate, the environment and public health have fared over that span of time. Particular attention will be given to the American agricultural system, but similarities can be found in other nations as they adopted industrial agricultural systems.

How Did We Get Here?

Before analyzing the last couple hundred years of ag, it’s necessary to take a brief journey through its complex and convoluted past to gain some all-important context. Most historians agree that modern agricultural practices began around the end of the last Ice Age (roughly 11,700 years ago) when various cultures across the planet began the process of domesticating plant and animal species.1 Our ancient ancestors expressed their latent capacity to shape wild landscapes and, in the process, learned they were no longer completely reliant upon the whims of nature for nourishment. This shift allowed communities to transition away from the nomadic lifestyle of hunting and gathering by learning how to produce a concentrated amount of food in one area of land. Towns, as well as specializations in art, politics, military, technology and economics, emerged and expanded as a consequence. More importantly, humanity’s relationship with the land changed in a dramatic way. Nature, at least partially, was now subservient to the desires of human civilization. This nature-shaping ethos has remained constant over the millennia, even though the exact methods of food production and distribution have changed drastically. Right, wrong or indifferent, this is the direction humanity took, and it’s what led us to where we are today.

 

This article will focus primarily on the last few hundred years of the food system, so for anyone wanting to dive deeper into the early history of agriculture, the following are great resources. First is the “Origin of Agriculture“, an entry from the Encyclopedia Britannica, and second is “The Oxford Handbook of Agricultural History” written by Jeannie Whayne.

Cave paintings provide historians insight into the the history of agriculture. This cave painting from Tassili n'Ajjer in Algeria depicts domesticated cattle and working of the soil, presumably for planting seeds.
Ancient Egyptian drawing of a cereal harvest.

Innovations in technology and markets in the last 200 years or so are worth focusing on because they have advanced humanity’s ability to produce food and influence the landscape like no other time in history. Specifically, two revolutions are recognized during this period as providing the catalyst for global changes in agriculture. The first is the Industrial Revolution of the 18th and 19th centuries that brought technology like Eli Whitney’s cotton gin, Cyrus McCormick’s mechanical reaper, John Deere’s steel plow and the steam engine. In addition, advances in chemical fertilizers, grain elevators and access to railways greatly increased productivity and access to markets, particularly in the U.S., Great Britain and Canada. This upward tick in efficiency allowed more rural citizens to migrate into cities as fewer farmers were needed to manage the same area of land. Not only that, rural communities produced surplus quantities to feed these burgeoning cities filled with promising industrial jobs. This resulted in a push and pull of rural citizens to urban areas. The transition from an agrarian society to an industrial one is typically a slow process. In the case of the United States, it wasn’t until 1920 that more than 50 percent of the population lived in urban areas. Bear in mind that many people classified as “urban” at that time lived in towns with populations around 2,500-3,000!2

 

 

While the U.S. and Great Britain had become industrial economies by the late 19th and early 20th centuries, many nations still operated agrarian-based economies at that time. These nations were especially vulnerable to the four horsemen of disease, pestilence, drought and flooding. Unfortunately, this meant living with the constant threat of famine. One example, among many, was Mexico in the 1940’s, where many fields of wheat were failing due to a disease called rust. Expert predictions pointed toward mass starvation. To prevent this catastrophe from happening, the Rockefeller Foundation’s Cooperative Mexican Agricultural Program was launched and Norman Borlaug, a budding young agricultural scientist at the time, headed south of the border. Borlaug and a team of others worked tirelessly to develop a disease-resistant wheat variety with a shorter stem. A short stem was desired because chemical fertilizer applications were producing wheat plants with seed heads too heavy for their lanky stems. Broken stems and drooping seed heads made it near impossible for wheat plants to grow properly or for them to be harvested efficiently. Borlaug and his team soon developed “dwarf” varieties of wheat that could hold up the weight of the bigger seed head and better withstand microbial disease pressure. Dwarf varieties drastically increased wheat production to the point where the Mexican economy became a net exporter of wheat in less than 20 years.3 News of this success story quickly spread around the globe and governments took notice, particularly Indian and Pakistani governments, who were trying desperately to prevent famine caused by rapid population growth. This prompted the call to Borlaug and his team. Borlaug agreed and began breeding plants to fit their southeast Asian context. After many tireless years of plant breeding, wheat yields increased by 60% in both nations, providing a much-needed boost in the fight against famine.4

 

Producing more food on the same land can’t come out of thin air, though. Modern high-yielding varieties have large appetites for nutrients and the ability to protect themselves from broad spectrum disease and pest pressures is often unintentionally bred out. This necessitated a concurrent rise in the use of chemical fertilizers and pesticides as new varieties were adopted. Despite the increased need for inputs, these varieties and the chemicals required to grow them were welcomed with open arms into the nations that had access and could afford them. The implementation of improved plant genetics, increased mechanization and high use of chemical fertilizers and pesticides of the mid-20th century was so widespread and influential that it has become known as the Green Revolution, the second of the two revolutions that dramatically shaped modern agriculture. Opinion is divided as to whether the Green Revolution was a net positive or negative, but one can’t deny the incredible impact it has had on modern society. In fact, it’s often said that the global adoption of Green Revolution technology has saved over a billion lives due to the significant increase in calorie production per agricultural acre. Once again, that’s something to be thankful for, especially from those who personally remember when the fear of famine hung over them like a perpetual dark cloud.

Global cereal production, global population and land use for cereals from 1961-2022
Prevalence of undernourishment in developing countries from 1970-2015

Adoption of the Green Revolution eventually set the stage for more of the world to transition away from agrarian economies. China, for instance, was able to start the transition once a more open economy and a change in agricultural policy were adopted and paired with Green Revolution methodologies. This led to a massive increase in food production, which helped trigger a migration of workers to industrial centers, which then fueled its path to becoming a global industrial powerhouse in just 35 years.5 The near-miraculous transition of Brazil’s agricultural sector6 and India’s ongoing transition7 are also worth recognizing.

 

Interestingly, the industrial economy is only a stepping stone to the third and final transition of national economies, which occurs as jobs and GDP from the agricultural and manufacturing sectors are surpassed by the service industry. The United States economy from 1840 to 2015 is a classic example of this transition from an agrarian to a service economy. Thanks to this progress, only a little more than 1% of American jobs are in the agricultural sector, compared to 9% in Brazil, 25% in China, and 43% in India.8

Employment by economic sector. National economies follow a similar pattern of transition, as evidenced by the United States. Economies begin as primarily agrarian, transition to manufacturing/industrial economies and finally into service-based economies.
The distribution of gross domestic product (GDP) by economic sector follows a very similar trajectory to employment numbers. The graph depicts US distribution of GDP by economic sector from 1839 to 2016.

Typically, this is the final message of any mainstream discourse on modern agriculture. Nature, and it’s pesky tendency to refuse bending to humanity’s will, has largely been tamed by modern science, technology and economics. When Nature steps out of line, we simply develop stronger methods to whip it back into shape. This progress, so the story goes, has consequently freed people from having to work in the primitive, depressing sector that is agriculture. Humanity has leveled-up and continues the march toward full separation from the natural order of this world. We are the master of our fate and the captain of our soul. 

 

So we think.

Conventional Agriculture: Get Big or Get Out

To summarize the previous section, agriculture began nearly 12,000 years ago when humanity learned it could influence plants and animals in ways that allowed us to control food production. Modern agriculture is really the same old story, just on a much grander, industrialized stage. To illustrate this point, consider the words of Secretary of Ag William Jardine who said in 1927 that, “The United States has become great industrially largely through mass production, which facilitates elimination of waste and lowering of overhead costs. Large-scale organization in the business world has affected tremendous economies both in production and distribution, and has enabled manufacturers to supply consumers with what they want when they want it. It seems to me that in this matter agriculture must follow the example of industry. It must have a similar and larger scale development of its business  organization managed by competent executives.”9,10 Agricultural economist E.G. Nourse echoed these sentiments by claiming, “the essential features of economic organization which have brought efficiency into industrial pursuits must be incorporated into agriculture or else it must remain the slow and backward brother in the family group of our economic life.”9 Last but not least, agricultural engineer Raymond Olney announced that, “No one will object to calling a farm a factory. It is a factory. The soil and seed are the raw materials, and from these are manufactured a variety of finished products, through the agencies of sun, air, moisture, power, and implements. The finished products of the farm factory are cereal, forest, vegetable, and fruit crops, and livestock and livestock products, are they not?”9

 

Driven by the attitudes of Jardine, Nourse, Olney and many others, agriculture in the United States was transitioning into an industrial practice throughout the first half of the 20th century. This transition was happening at a fair pace, no doubt, but policy changes in the 1970’s sent the change into overdrive. Earl “Rusty” Butz , former secretary of agriculture in the Nixon and Ford administrations, is often attributed as the person most responsible for catalyzing the modern industrial mindset in American agriculture. Butz entered his position as secretary of ag at a time when the US government enforced caps on grain production for the purpose of mitigating the risk of overproduction, which would depress prices. Farmers were paid to leave land out of production when data showed there was a heightened risk of oversupply. Land would go back into production as supply dropped and prices rose. Butz did not support these production caps. His idea was to unchain the American farmer from obvious government overreach so they could achieve maximum output. To assuage the fear that lifting restrictions wouldn’t lead to Depression-era overproduction, low prices and farm foreclosures, Butz promised that the US government would broker deals with the global market to sell the surplus.11 This solution persuaded enough politicians to jump on board, and the repeal of production caps was included in the Farm Bill of 1973. Butz announced the win by saying, “With the new Farm Act, we have experienced a 180-degree turn in the philosophy of our farm programs. We’ve abandoned the longtime philosophy of curtailment and cutback to the new philosophy of expansion. We’re going to see the most massive increase in production of farm products ever in the history of this country.”12 Farmers were urged to partake in this new philosophy of expansion by “planting from fence row to fence row“, which would ensure every acre of farmland was given the chance to maximize production.

 

Butz and Nixon’s new agricultural policy led to an immediate drop in US grain supplies due in large part to mass exports of surplus to the Soviet Union. This had the effect of raising grain prices for the American farmer. As a result, millions of Midwestern farmers spent the 1970s “taking on debt to buy more land, bigger and more complicated machines, new seed varieties, more fertilizers and pesticides, and generally producing as much as they possibly could.”13 Unfortunately, the good times didn’t keep rolling. Soviet purchases of grain slowed down, and U.S. grain supplies increased as the decade came to a close. The 1980’s ushered in a period of depressed prices due to oversupply, as well as high interest rates on skyrocketing debt, leading to thousands upon thousands of farm foreclosures.14 “Get big or get out”, a phrase championed by Butz, was in full swing. Eventually, the Farm Bill of 1985 brought about policy to stop the bleeding, but serious damage had already been done to rural America. Those that had “gone big” lived on, while many of the rest were forced to “get out”.

 

The morality of such a system is up for debate, but one thing is for certain: “Economies of scale” was now the name of the game. Agriculture had become a race to the bottom to see who could produce the most at the lowest cost, just like any other industrial product. Oftentimes, the term “conventional agriculture” is used to describe this modern system of farming at scale. One insightful definition of conventional agriculture can be found in the Essentials of Environmental Science textbook. Author Kamala Drosner writes that, “Conventional farming systems vary from farm to farm and from country to country. However, they share many characteristics such as rapid technological innovation, large capital investments in equipment and technology, large-scale farms, single crops (a.k.a. monocultures); uniform high-yield hybrid crops, dependency on agribusiness, mechanization of farm work, and extensive use of pesticides, fertilizers, and herbicides. In the case of livestock, most production comes from systems where animals are highly concentrated and confined.”15  For better or worse, the adoption of conventional agriculture has turned agriculture, traditionally diversified and region-specific, into an increasingly homogenized, globalized and industrialized process.

President Richard Nixon and Secretary of Agriculture Earl Butz discuss business in the White House's Oval Office.

Now that a way-too-brief overview of the modern agricultural system is out of the way, it’s time to get to the meat and potatoes of the issue at hand. The following sections will detail which sectors of the agricultural economy have benefited the most during this shift from agriculture to agribusiness. The goal is not to demonize anyone or any system. After all, humanity has long searched for systems that could stave off starvation through ample food production. Modern science, technology and industry have done an incredible job of accomplishing this task to sufficiently feed the world’s population. This is worth acknowledging and praising, in my opinion, even if there have been so-called bad actors influencing the direction along the way. Rather, the goal of the following sections is to elucidate how various sectors and those within each sector have fared during the industrialization of agriculture. This includes 1) the agricultural input industry, 2) farmers and rural communities, 3) processors, handlers and sellers of agricultural products, 4) public health and 5) the environment.

Agricultural Input Industry

Farmers in centuries past typically worked on small-sized plots with team animals, a couple implements, seeds and livestock. Many of those inputs were produced and/or reared by the farmer. Now, a typical conventional row crop farmer needs to rent or purchase an enormous tract of land, a tractor or two, a combine harvester, various implements, a grain cart, tools to repair their equipment, a shop to work on their equipment, a mechanic to repair what they can’t, fertilizer, pesticides, seeds, irrigation systems, bins to hold their grain, trucks to haul the grain to the buyer and energy in the form of diesel and electricity to run their equipment. Much of the same goes for modern livestock producers, with the addition of pharmaceutical products, haying equipment, supplemental feed and facilities to hold, handle and milk livestock. Every single one of these inputs costs the farmer or rancher money, so it’s easy to see just how lucrative the agricultural input industry can be given the sheer quantity of stuff farmers are told they need to purchase in order to be successful.

 

One input worth investigating is the agricultural machinery industry. As is the case with most industries, market concentration has resulted in a few large corporations dominating this space. In 1921, there were 186 different companies vying for space in the tractor market and hundreds of others producing farm equipment. Now, barely a dozen major companies produce farm equipment for the United States market, with about 5 players dominating the space. (https://www.agdaily.com/lifestyle/evolution-of-farming-a-new-look-at-old-traditions/,https://www.mordorintelligence.com/industry-reports/united-states-agricultural-tractor-machinery-market ) It’s hard to imagine given today’s omnipresence of tractors and combines, but only about 600 tractors were in use in 1907 in America. That number grew to almost 3.4 million by 1950. (https://www.britannica.com/topic/agriculture/Scientific-agriculture-the-20th-century) Today, there are an estimated 4.4 million tractors in use in America and over 25 million worldwide. (https://data.worldbank.org/indicator/AG.AGR.TRAC.NO)

 

How to feed the world page 107 + https://www.dtnpf.com/agriculture/web/ag/blogs/machinerylink/blog-post/2021/01/22/machinery-industry-sees-growth-2020

 

As a result of this rise in demand, individual companies and their executives in this highly consolidated space are experiencing unprecedented financial success. For example, John Deere net income has increased from $2.8 Billion in  2011 to $10.1 Billion in 2023 (https://www.macrotrends.net/stocks/charts/DE/deere/net-income) These gains aren’t without their challenges, as John Deere has recently (July 2024) laid off employees in Illinois and Iowa and will move the production of skid steer loaders and compact track loaders from its Dubuque, Iowa facility to Mexico by the end of 2026 due to inflation and decreased demand. (https://finance.yahoo.com/news/john-deere-announces-mass-layoffs-172937300.html) Still, John Deere has done well enough for Chairman, Chief Executive Officer, and President at DEERE & CO, John C. May to make $26,285,804 in total compensation for the fiscal year 2023. Of this total $1,591,674 was received as a salary, $5,911,159 was received as a bonus, $5,733,640 was received in stock options, $12,446,367 was awarded as stock and $602,964 came from other types of compensation. (https://www1.salary.com/John-C-May-Salary-Bonus-Stock-Options-for-DEERE-and-CO.html)  AGCO corporation, another American  corporation, has seen annual net income skyrocket from $136 million in 2009 to $1.2 billion in 2023. (https://www.macrotrends.net/stocks/charts/AGCO/agco/net-income) As Chairman, President & CEO at AGCO CORP, Eric P. Hansotia made $14,704,086 in total compensation. Of this total $1,316,667 was received as a salary, $3,732,750 was received as a bonus, $0 was received in stock options, $9,252,255 was awarded as stock and $402,414 came from other types of compensation. (https://www1.salary.com/Eric-P-Hansotia-Salary-Bonus-Stock-Options-for-AGCO-CORP.html) Internationally, CNH equpiment and services raised net profits from $677 million in 2013 to $2.3 billion in 2023. (https://www.macrotrends.net/stocks/charts/CNH/cnh-industrial/net-income) German agricultural machinery company Claas reported profits of €347.1 million in 2023, up 259% from 2022. (https://annualreport.claas.com/2023/index_en.html) Many companies in this space bring in revenue from sources other than ag equipment, such as John Deere’s financial services offered to farmers and ranchers. (https://www.wsj.com/articles/americas-farmers-turn-to-bank-of-john-deere-1500398960)

 

To ease fears that successful corporations have been cherry-picked to prove a biased agenda, let’s take a look at the ag equipment market as a whole. According to Mordor Intelligence, a market analyst group, the agricultural machinery market is reaching new heights of financial success. They report that, “The United States Agricultural Machinery Market size is estimated at USD 39.56 billion in 2024, and is expected to reach USD 53.70 billion by 2029, growing at a CAGR (Compound Annual Growth Rate) of 6.30% during the forecast period (2024-2029).”( https://www.mordorintelligence.com/industry-reports/united-states-agricultural-machinery-market) Worldwide, the Agricultural Machinery Market size is estimated at USD 151.55 billion in 2024, and is expected to reach USD 197.19 billion by 2029, growing at a CAGR of 5.40% during the forecast period (2024-2029). Source: https://www.mordorintelligence.com/industry-reports/agricultural-machinery-market) Increased labor costs and increased average farm size make farmers adopt agricultural machinery in farming, fueling the market growth studied during the forecast period. (https://www.mordorintelligence.com/industry-reports/united-states-agricultural-machinery-market)

U.S. Agricultural Machinery Market. Courtesy of Mordor Intelligence.
Global Agricultural Machinery Market. Courtesy of Mordor Intelligence.

Once the proper equipment has been acquired, the farmer or rancher can focus on agrochemical and seed inputs. What good is the equipment if it’s not being used to grow something? Beginning with agrochemicals, these industrial products are “any chemical used in agriculture, including chemical fertilizers, herbicides, and insecticides. Most are mixtures of two or more chemicals; active ingredients provide the desired effects, and inert ingredients stabilize or preserve the active ingredients or aid in application.” (https://www.britannica.com/technology/agrochemical) Arguably the most influential agrochemical is the fertilizer.  Farmers have been adding slow-release fertilizer to their fields for centuries in the forms of organic products like compost and manure. In fact, recycling human manure (a.k.a. night soil) back to agricultural fields was an integral cultural practice in many regions of the world that sustained thousands of successive generations on the same land, including China, Japan and Korea, as documented in the 1911 classic Farmers of Forty Centuries, written by F. H. King in 1911. Today, most fertilizers applied to farms and ranchers are synthetic, meaning they are processed and packaged in a factory in an inorganic form separate from any organic matter like manure or compost. Inorganic nitrogen fertilizer is the most produced and applied synthetic fertilizer by a wide margin. The reason, as many farmers and ranchers know, boils down to simple biology.

 

Proteins are among the most abundant molecules in the bodies of living organisms because they perform a near infinite amount of jobs. In fact, one cell may contain hundreds or thousands of proteins, each with a different job. These include proteins that support the structure of the cell, aid in cell movement, act as communication signal between cells or facilitate the building or breaking of other molecules, which is the job of a very special group of proteins called enzymes. All proteins, no matter their job, are made up of basic units called amino acids that are linked together. Every single amino acid contains a nitrogen (the symbol for simplicity’s sake is N), which is one reason why its demand in living organisms is so high. Anytime you see “amine” or “amino”, think N. Another reason N demand is so high in living organisms is that it is a key component of nucleic acids, the genetic compounds in living organisms. DNA (DeoxyriboNucleic Acid) is a nucleic acid which contains the blueprint for the production of proteins that make up living organisms. RNA (RiboNucleic Acid) is another nucleic acid, but its job is to transport the information contained in DNA to sites that translate the information into amino acids that link to become proteins. Lastly, N can be an important constituent of molecules that don’t fall under the umbrella of carbohydrates, proteins, nucleic acids or fats. One such molecule is the photosynthesis powerhouse chlorophyll. Each green-reflecting chlorophyll molecule contains four N atoms, which is why plants often green-up with nitrogen fertilizer applications. More chlorophyll molecules are produced, which increases the amount of green light from sunlight reflected back to your eye. Basically, N is at the heart of almost every single process happening in living organisms. Without N, there are no proteins, no nucleic acids, no photosynthesis and no life.

The basic unit of protein, called an amino acid, is made up of a central carbon attached to an amino group, a carboxylic acid group, a hydrogen atom and a side chain. Only side chains vary between amino acids. The other three groups stay the same.
The basic unit of DNA, called a nucleotide, is made up of three parts: a phosphate group, a sugar and a nitrogenous base. This is one reason why living organisims like plants need nitrogen (N) and phosphorus (P) in large quantities.
"Chlorophyll a" molecules contain 4 N atoms. Credit: Khan Academy

The good news is that aboveground creatures are literally swimming in N, as the air is composed of around 78% N. The bad news is that the form on N in the air is unusable for living creatures. When two N atoms come together, they create an incredibly stable gas, N2, which remains unreactive for decades. This is why the enormous quantity of N you take in with every breath has no effect on your body. N2 goes in the lungs, N2 goes out of the lungs. Due to its unreactive nature and high demand in living organisms, N is often the limiting factor for biological activity in ecosystems. Nitrogen nitrogen everywhere, not an atom to drink! So how does N become available for living organisms (a.k.a bioavailable)? Besides lightning and cycling N that’s already in bioavailable forms, a group of clever microbes are able to pick the lock holding N2 together and bring more N into the realm of the living. The key they use is an enzyme called nitrogenase and the process is called nitrogen fixation. Enzymes catalyze chemical reactions to happen millions of times faster than they would occur on their own, such as the breaking apart of an N2 molecule. It would be handy if every creature had nitrogenase in their chemical arsenal, but fungi, plants and animals don’t have the ability to produce it, so ecosystems have historically had to rely heavily on these tiny microbial miracle workers to unlock N from the air. How to Feed the World Page 157 Legumes in Northern Europe farmers understood legume covers and crops helped, but it wasn’t enough to get the yields of today. That was until Fritz Haber and Carl Bosch stepped onto the pages of history. These two Germans, and a team of others, worked out a way to crack open N2 by brute force. Sometimes canonized, oftentimes demonized, this synthetic nitrogen fixation innovation was discovered in 1909 by German chemist Haber and later engineered for mass production by his fellow countryman Bosch in 1913. In the factory, N2 gas is heated up to 300 degrees Celsius and compressed in a chamber with 200-300 times normal atmospheric pressure. Only then will the two nitrogen atoms release their quantum grip. Then, the individual N atoms have three hydrogen (H) atoms slapped onto each of them, which makes ammonia (NH3) gas. As you can see, the Haber-Bosch process is extremely energy intensive and makes up 10% of agricultural emissions worldwide, as well as taking up 1-2% of the world’s total energy use. (Menegat et al., 2022) (https://edis.ifas.ufl.edu/publication/AG462)  Incredibly, nitrogenase produced by single-celled microbes is able to fix N into bioavailable ammonia (NH3) at moderate outdoor temperatures and normal atmospheric pressure. No giant factory or fossil fuels needed. Chemists still don’t fully understand how nitrogenase is able to separate N2 so efficiently.

Haber-Bosch production of ammonia.

Once ammonia is produced, whether in the factory or by microbes, there is still room for one more H to jump on board. This additional H atom transforms potent ammonia gas  (NH3) into the plant fertilizing compound ammonium (NH4). Another form of N that plants readily take up is created by stripping all H atoms and replacing them with three oxygen (O) atoms to get nitrate (NO3). Many fertilizers intended to make life proliferate contain ammonium and/or nitrate. Ironically, ammonium nitrate is also a key component of explosives whose intention is to bring death and destruction, like when Timothy McVeigh  infamously detonated two tons of ammonium nitrate in front of  the Alfred P. Murrah Federal Building in Oklahoma City on April 19, 1995, killing 168 people. (https://www.britannica.com/event/Oklahoma-City-bombing) Ammonium nitrate is also liable to detonate purely by accident during its production and storage. One example is the 1921 detonation of 4,500 tons in Oppau, Germany, killing more than 500 people. Another is the 1947 detonation of more than 2,000 tons, killing at least 587 people at a shipping port in Galveston Bay, Texas, making it the deadliest industrial accident in US history. (https://www.bbc.co.uk/news/explainers-53664064) More recently, the 2020 explosion of 2,750 tons of stored ammonium nitrate in Beirut, Lebanon killed at least 218 people and left 300,000 temporarily homeless in a detonation estimated to be one-twentieth the strength of the atomic bombs dropped on Hiroshima and Nagasaki in 1945. (https://www.bbc.co.uk/news/live/world-middle-east-53664184) Until around 1939, the predominant use for American-made ammonium nitrate was intended for such explosive uses, as it was safer to handle than other choices of the time. A small percentage of Haber-Bosch N was used as fertilizer, although Europeans began using the compound for agricultural purposes soon after World War I.

 

The need for ammonium nitrate and other N-based products rose sharply at the advent of World War II, which necessitated the construction of 10 new ammonia plants scattered across Middle America. By 1943, America was producing so much ammonia and ammonium nitrate that a surplus was distributed to farmers during the war. Farmers undoubtedly stood amazed at the greening effects and increase in yields that this miracle fertilizer brought to their crops. By 1945, American plants were pumping out 730,000 tons of ammonia per year and had the capacity to produce up to 1.6 million tons. (https://cropwatch.unl.edu/fertilizer-history-p3) Yet, as we know, the war came to a close in 1945 and politicians and private sectors business leaders needed to figure out what to do with these government-owned ammonia plants. (https://pubs.acs.org/doi/10.1021/ed8000683) The decision was made to keep the factory lines open and pivot toward producing N-based fertilizers. Farmers have been adding prodigious amounts of synthetically produced nitrogen fertilizer to the soil ever since. One estimate using United Nation’s Food and Agriculture Organization (FAO) data indicates that N fertilizer consumption increased from 11.3 Tg N yr−1 (0.9 g N m−2 cropland yr−1) in 1961 to 107.6 Tg N yr−1 (7.4 g N m−2 cropland yr−1 on average) in 2013. (1 terragram =  1 billion kilograms.) Farmers in the U.S. and western Europe were the first to apply N fertilizer on a large scale after the war, but rates of application in these regions peaked in the 1960s. The hot spots of N fertilizer application slowly shifted to eastern Europe and eastern Asia throughout the 1980s and 1990s. South American farmers also rapidly adopted N fertilizer and increased its use, particularly in small Brazilian, with N consumption reaching US levels. At the moment, China currently ranks in the highest position for N fertilizer consumption in the world, going from a consumption level of 0.06 Tg  N  yr−1 (0.05 g  N  m−2 yr−1) in 1952 to 28.31 Tg  N  yr−1 (17.06 g  N  m−2 yr−1) in 2018. (https://essd.copernicus.org/articles/14/5179/2022/) Although cropland has expanded widely in Africa, its average N fertilizer use rate has increased slowly, with most areas still receiving less than 1.5 g N m−2 yr−1 in 2013. For comparison, some areas of eastern and southeastern China receive more than 30g N m−2 yr−1. Globally, FAO data indicate that N fertilizer consumption increased from 11.3 Tg N yr−1 (0.9 g N m−2 cropland yr−1) in 1961 to 107.6 Tg N yr−1 (7.4 g N m−2 cropland yr−1 on average) in 2013. (https://essd.copernicus.org/articles/9/181/2017/essd-9-181-2017.pdf)

Global N fertilizer consumption (1961-2021)

Biggest N producers and companies profiting. The top N fertilizer companies are…. War in Ukraine Russia… Companies making the most money…

 

N fertilizer has proven to be a key input in the fight to feed the growing population, as its application has aided more plant growth all across the globe. More plants means more food, whether by direct consumption or the consumption of animals that we eat that eat plants. But N is far being the only nutrient that plants and other living organisms require. In fact, only around 3% of a plant’s weight is N. Carbon (C), Hydrogen (H) and Oxygen (O) are in much higher demand, making up roughly 94% of the weight of living organisms. Fortunately, plants and microbes are able to bring in these essential nutrients nearly out of thin air. N is fixed by microbes from the air, while photosynthesis brings in C as CO2 and H and O as water (H2O). The final 3% of atoms that make up the weight of living organisms don’t originate from air and water. Rather, they come from rocks and minerals in the Earth’s crust. Abiotic (non-living) or biotic (living) factors chisel them away and make them available for uptake by a microbe, plant or animal. Once these atoms are set free from their rocky prison they cycle in and out of living organisms, get transported to locations via wind or water and eventually become rock or minerals again by combining with other atoms. This is generally how the remaining 13 essential nutrients cycle. Humans circumvent this slow cycling by thousands and millions of years through the mining of rich mineral veins and industrial processing. We’re kind of like enzymes in that respect when you think about it!

 

Of these 13 mineral-based nutrients, phosphorus (P) is utilized as a crucial atom in the structure of many basic biological compounds. P doesn’t always get the press time that N does, but it is instrumental in maintaining life on this planet. For one, P is the central atom for one of the basic units that make up the “backbone” of DNA and RNA. In addition, P plays an integral role in the structure and functioning of Adenosine Triphosphate (a.k.a. ATP), which is considered the energy currency for all of life. Whether we’re talking about microbes, plants, livestock or humans, being alive and staying alive requires a lot of energy. ATP molecules are like mobile energy stations that are transported to the site of an energy-intense process. They do this by cramming three negatively charged phosphate (PO4) ion together. Just like magnets or three teenagers in the back of a car on a long road trip, these negative charges don’t want to be next to each other, so it takes energy to cram them together. This energy gets released and is utilized to power the biological process that needs it. Lastly, P is an important component of the cell membranes of organisms. The scientific term for cell membranes is actually the “phospholipid bilayer”. Cell membranes are essential for survival because they create a clear delineation of the cell from its surrounding environment, provide protection, and facilitate the transportation of items in and out of the cell, among many other jobs.

Structure of adenesine triphosphate (ATP), the compound which all living organisms utilize to carry energy and release it wherever it is needed.
Cells of living organisms are bounded by membranes, most of which are composed of repeating phospholipid units. Phosphrous is the central atom of the polar head, while neutral charged fatty tails are made of carbon and hydrogen.

It doesn’t get more essential than genetic material, energy and the cell membrane, so the body of a living organism needs a lot of P. If that’s the case, P must be found in great abundance all over the Earth, right? Well, not so much. P is actually quite a finicky element for its place of prominence in the lives of organisms for a couple of reasons. The first complication is that total P content is relatively low in in soil, ranging from 500 to 10,000 kg P in the upper 50 cm of 1 hectare of land. (Nature Property Soils, pg. 662) Not only that, the relatively few P atoms in soil readily turn into stony material like apatite that is unavailable for direct consumption by living organisms. Energy- and time-intensive processes are required to wriggle the P out of stone and into forms that living organisms can use. In nature, fungi are especially adept at wrestling P away from rocks through mechanical and chemical weathering. In fact, it’s no exaggeration to say that soil fungi run the largest mining operation in the world when the scope of their work is aggregated. (https://www.earthhaven.ca/blog/mycorrhizal-fungi-run-the-largest-mining-operation-in-the-world/174) Even so, P will revert back to stone whenever possible. The reactions are just that favorable, which explains why as little as 10–15% of the P in fertilizers and manures is taken up by plants in the year of application. (https://www.amazon.com/Nature-Properties-Soils-15th/dp/0133254488 (pg 644)) Put simply, there’s not a ton of P in the soil and a small percentage of P is available for living organisms to use.

 

So how has society overcome the P problem and supercharged crop and livestock production in the past couple of centuries? By finding sources of P-rich material and flooding the soil with enough to overcome the inconvenient nature of P. In other words, fertilizer. Traditionally, organic amendments like manure and compost were the largest source of P added back to the soil. Many societies even figured out that crushed bones improved plant growth, but didn’t know why. We know now that bones and teeth have a prodigious amount P in the form of hydroxyapetite. It wasn’t until the 19th century when English scientists learned how to extract and purify P from products like bone meal, coprolite (fossilized poo) and P-rich rocks to create superphosphate fertilizer. (https://ia803208.us.archive.org/19/items/food_resources/Food-Compost%26Fertilizer/History_of_Fertilizer-2016.pdf) Unfortunately for them, another up-and-coming poo-based fertilizer was hitting the market, which eventually pushed superphosphate to the side. In what’s become a cautionary tale for resource sustainability, the N- and P-rich fertilizer that was all the rage in mid-19th century Europe and America was… bird poo, a.k.a. guano. Wild bird manure off the coast of South America and other islands scattered across the Pacific and Atlantic, to be exact. 

 

Long before the construction of the Panama Canal, American ships traveling from the east coast were forced to sail around the tip of South America and up through the Pacific to reach the west coast and the gold treasure that await them in California. With the help of European geographers in South America, it soon became common knowledge that islands off the coast of Peru were layered with nutrient-rich bird poo that had been accumulating for millennia, with some deposits reaching two hundred feet in depth. Barrels of guano were sent back to both European and American farmers to test the fertilizing effects of this new organic amendment. What farmers saw was a tremendous crop response thanks to the high concentration of N, P and potassium (K). Edward Lloyd, former governor of Maryland from 1809-1811, declared guano “the most powerful manure he had ever seen applied to corn.” (https://reginajeffers.blog/2016/05/11/guano-fertile-fortune-of-the-19th-century/) Interestingly, some farmers wondered if “the enormous crops realized under its stimulus might exhaust the land of its productive elements.” (https://www.atlasobscura.com/articles/when-the-western-world-ran-on-guano) These concerns fell on ears overwhelmed by the deafening “cha-ching!” of profit. The word was sent out and ships traversed the ocean blue in search of any island or rock layered with this precious poo. The guano industry quickly matured, businessmen became wealthy and workers became exploited. (https://www.atlasobscura.com/articles/when-the-western-world-ran-on-guano) So too was the resource, but why would they let future availability stop a money-making endeavor right now? That’s a problem for future people to deal with.

 

The United Kingdom dominated early guano mining and ended up importing over two million tons of guano fertilizer for their farmers from 1841-1857.  Anxiety soon spread across the pond as Americans saw the miraculous results achieved from its application, which prompted President Millard Fillmore to address the guano issue in his first State of the Union Address in 1850. He said, “guano has become so desirable an article to the agricultural interest of the United States that it is the duty of the Government to employ all the means properly in its power for the purpose of causing that article to be imported into the country at a reasonable price. Nothing will be omitted on my part toward accomplishing this desirable end.” (http://presidentialrhetoric.com/historicspeeches/fillmore/stateoftheunion1850.html) The Guano Islands Act of 1856 was eventually enacted by Fillmore’s successor, Franklin Pierce, which allowed any United States citizen to claim any unoccupied island or rock that was not under the jurisdiction of any other government. Hundreds of islands and groups of island became U.S. territories under American federal laws. Paul Johnston, curator of the exhibition, “The Norie Atlas and The Guano Trade,” at the Smithsonian’s National Museum of American History, claims that this hunger for fertilizer was essentially, “the start of
American imperialism.” (https://www.smithsonianmag.com/smithsonian-institution/how-gold-rush-led-real-riches-bird-poop-180957970/) While many were deserted, some guano islands are still U.S. territories under American federal law, including Midway Atoll, site of the famous World War II battle, the Battle of Midway.

 

As is the case with any non-renewable resource, the bons temps can’t rouler forever. Guano mining throughout the 19th century exhausted the most abundant and easily extractable sources first, making it more and more expensive to ship to North America and Europe. In addition, guano replenishment crashed as ships scared the sea birds away and as the fishing industry depleted sardines, an important source of food.  By the turn of the 20th century, the vast majority of accessible guano had been mined and shipped off. This crushed the industry and took the Peruvian economy down with it, as around 60% of the Peruvian economy was tied to the stuff. 

Chinese guano miners at the Great Heap, Chincha, Peru.
Equitable Fertilizing Company advertisement

The story of guano is important to highlight because it encapsulates repeated themes in the history of mankind’s use of natural resources, particularly those required for agricultural production. First, a resource is discovered to have some kind of use for society (and potentially make someone a lot of money). “Discovered” is used loosely because oftentimes indigenous peoples had been utilizing the resource for a very long time. In the case of guano, the Inca people of South America had known about its fertilizing effects for centuries. Second, a new industry is created around it or an already existing industry shifts to accommodate the new resource in demand. This is can be done through capitalistic ingenuity, but is often heavily incentivized by government intervention, as was the case with the Guano Islands Act of 1856. Fraud and condescending marketing are also rife during this time as companies attempt to take the lead in this new space. Upon discovering guano on Ichaboe Island off the coast of Namibia in Africa, Liverpool businessman J. H. Sheppard quickly set up a mining operation to export guano to Europe and quickly dispersed a pamphlet to farmers declaring they, “may look forward with pleasure to a certain supply of genuine guano early next spring.” (https://books.google.co.uk/books?id=niAVUjAzspQC&pg=PP4&lpg=PP4&dq=Ichaboe+Island+guano&source=bl&ots=DI2PffDlVW&sig=N2Ph2b3iPso98yNNbi2Y8vJLNQI&hl=en&sa=X&redir_esc=y#v=onepage&q=Ichaboe%20Island%20guano&f=false) Not that dumb old South American bird poo everyone else is getting. No sir! Third, conflict may arise as groups fight for control of the resource. The guano-influenced Spanish-Peruvian war for the Chincha Islands and the War of the Pacific between Chile, Bolivia and Peru come to mind. (https://militaryhistorynow.com/2012/07/10/a-shitty-little-war-peru-fights-spain-over-animal-turds/)  Fourth, winners of military or legal battle become extravagantly wealthy from the processing and selling of the resource. Often, the winners are those in positions of political power and a few businesspeople. Workers may also benefit from new job opportunities and society at large may benefit from the usefulness of the resource. That is, the society that gets to use the resource and the workers that are treated fairly. In the guano industry, Peruvian, British, and American companies, for all intents and purposes, enslaved Chinese and indigenous Pacific Island peoples to mine the white gold. (https://www.atlasobscura.com/articles/when-the-western-world-ran-on-guano) Fifth, a combination of greed and the Tragedy of the Commons leads to the eventual depletion of the finite resource and a collapse of the industry. In the case of Namibia’s Ichaboe Island, 450 ships carried away guano in 1844. By May of the next year, the island was deserted and 25 feet shorter to boot. (https://www.atlasobscura.com/articles/when-the-western-world-ran-on-guano) Talk about a land grab.

 

Mine, cash in, exhaust, desert. This linear chain of events repeated itself island and island, leaving farmers with fewer and fewer barrels of guano to utilize. In a prescient magazine article titled “The Guano Crisis”, one British farmer predicted not only the guano bust, but the rise in synthetically produced fertilizer like Haber-Bosch ammonia. The author writes, “We are just now at the very height of our guano difficulty. That is to say, this is the season – a most favourable season, too – when above all others we need  it; and there is none to be had. One of our most respectable manure-dealers was, for the first time, on Saturday, directly refused. They could not even promise him any further supply. When people have gradually accustomed themselves to the matter-of-course use of anything, the unexpected want of it must be very severely felt. This is the case with the farmer. We want guano as a manure for our barley and oats, and as a top-dressing for our wheat. We have reckoned more or less on our customary allowance, and have consequently neglected proportionately, to provide any substitute. With ordinary care, as we begin to see now when it is too late, we might have fallen back upon our own resource; as it is, however, there is an extraordinary and altogether unprecedented run on such manufactured manures as contain the ingredients required – ammonia and phosphates especially. The makers and dealers are at their wits end to answer the orders pouring in upon them, and go from one to the other anxiously seeking the material to fulfill them.” (https://www.atlasobscura.com/articles/when-the-western-world-ran-on-guano ; https://books.google.co.uk/books?id=-idOAAAAYAAJ&pg=PA266&lpg=PA266&dq=%22One+of+our+most+respectable+manure-dealers+was,+for+the+first+time,+on+Saturday,+directly+refused%22&source=bl&ots=mVt21ksDVQ&sig=JKnZJ4VNCx-IZ9_t6uqiq6vZ1FI&hl=en&sa=X&redir_esc=y#v=onepage&q=%22One%20of%20our%20most%20respectable%20manure-dealers%20was%2C%20for%20the%20first%20time%2C%20on%20Saturday%2C%20directly%20refused%22&f=false)

 

Without guano to fulfill their fertilizer fix into the future, farmers around the world needed to find another concentrated source of P they could rely on. One source known for centuries to benefit plant growth was the crushed bones and teeth of vertebrate animals. Around 80% of the P in vertebrates is found in bones and teeth as the mineral hydroxyapatite (Ca10(PO4)6(OH)2),  which helps make bones harder than steel on an ounce for ounce basis. (https://www.discovermagazine.com/health/new-analysis-of-bone-helps-explain-why-its-so-strong) It wasn’t until 1770, though, that Swedish scientists discovered bones were rich with P. Soon after, it was discovered that combining bone ash with sulfuric acid made for a more available source of P. Justus von Leibig, the famed 19th century scientist attributed with many breakthroughs in agricultural chemistry, wrote in the journal Organic Chemistry in Its Application to Agriculture and Physiology in 1840 to, “… pour over the bones, in a state of fine powder, half their weight in sulfuric acid diluted with three or four parts water, and after they have digested for some time, to add one hundred parts of water, and sprinkle this mixture over the field before the plow … Experiments have shown that neither corn, nor kitchen-garden plants, suffer injurious effects in consequence, but that on the contrary they thrive with much more vigor” (Liebig, 1840).” (https://www.tfi.org/wp-content/uploads/2017/07/p-past-history-and-contributions-to-the-globbal-food-supply.pdf) Carcasses from slaughterhouses were a popular source of bones throughout the 19th century, particularly in Europe, but they could not totally fulfill the demand that farmers had for P. English chemists then turned to coprolite, fossilized manure, as another short-lived source. (https://www.tfi.org/wp-content/uploads/2017/07/p-past-history-and-contributions-to-the-globbal-food-supply.pdf) Across the pond, however, American settlers moving westward across the Great Plains hit the jackpot as the continent offered a once-in-a-lifetime source of bones to be used as a fertilizer source. The only problem was that the skeletons were annoying contained within millions of living bison. So rather than bring the animals to slaughter, these pioneers brought the slaughter to the animals.

 

The mass slaughter of tens of millions of bison provided a hefty source of bone ash for P fertilizer, as well as an input in the refining of sugar and fine bone china. Buffalo hide was also a hot commodity for its transformation into leather. (https://www.researchgate.net/figure/Large-pile-of-bison-skulls-that-will-be-ground-into-fertilizer-in-the-US-around-1870_fig5_283584918) Another objective was to starve Native American populations of their principal food source. Unfortunately, as is the case with many large mammal populations encountered by humans throughout history, wild bison were nearly driven to extinction as their numbers were reduced from as much as 80 million in 1800 to as low as a few hundred by the end of the century. The near extinction of wild North American bison follows the same plotline as the guano story: Mine, cash in, exhaust, desert. Luckily, two wild populations remained, a small group in Yellowstone National Park and another in northern Alberta, Canada, with a smattering of individuals in zoos and private ranches. Today, there are around 500,000 bison thanks to the efforts of conservation groups and individuals.

Photo from the mid-1870s of American bison skulls. (Source: Burton Historical Collection, Detroit Public Library via Wikimedia Commons)

With poo and bones proving to be flashes in the pan, how else was agriculture to feed its P appetite? Ironically, apatite. It turns out that the Earth’s crust contains rocks with a high concentration of P, including a group of oxygen-bound minerals known as apatite. Modern industrial agriculture relies on this rock-derived P, even though the element makes up approximately 0.09% of the Earth’s crust by weight. (https://www.sciencedirect.com/science/article/pii/S0960982217313830) As such, superphosphate fertilizer produced with dilute sulfuric acid increased in popularity throughout the 19th century as supplies of bird poo, fossilized poo and bones ran low. Another bonus was that the concentration of P in superphosphate from rock dwarfed not only that of most manures and composts, but even basic slag, a by-product of smelting phosphatic iron ores, which was commercially introduced during the 1870s.(https://home.cc.umanitoba.ca/~vsmil/pdf_pubs/originalpdfs/aree2000-2.pdf) Even so, superphosphate fertilizer contains a relatively low amount of P, as only 20% of it is P2O5. (The quantity of P in fertilizer is reported as P2O5, which means 44% of that value is actually P. Example: 20% P2O5 in superphosphate x 0.44 = 8.8% of superphosphate is made up of P.)

 

Industrial mining of P-rich apatite had actually begun in the middle of the guano craze in Norway in 1851, and was followed shortly thereafter by mining operations in France and Belgium. Phosphate mining in the United States began in North Carolina in the late-1860s, but it wasn’t until 1888 when bountiful veins of P-rich rock were  discovered in Florida. Mining in the Sunshine State has dominated American production of P to this day, with 27 phosphate mines covering more than 450,000 acres. As of 2024, only 9 remain active sites. (https://home.cc.umanitoba.ca/~vsmil/pdf_pubs/originalpdfs/aree2000-2.pdf ; https:// floridadep.gov/water/mining-mitigation/content/phosphate) Single superphosphate was the first P fertilizer sourced from rocks to be made available commercially and it dominated the P fertilizer market for more than 100 years. Another more concentrated superphosphate called triple superphosphate (TSP) with around 44% – 48% P2O5 (19-21% P) was discovered in Germany in the early 1870s (https://acsess.onlinelibrary.wiley.com/doi/abs/10.2134/agronmonogr46.c25), but it required the input of another acid, phosphoric acid. This was an issue because phosphoric acid wasn’t widely available until the first phosphoric acid plant opened in the 1950s. (https://acsess.onlinelibrary.wiley.com/doi/book/10.2134/1980.roleofphosphorus). Production of TSP soon skyrocketed, as did the extraction P-rich rock from the Earth’s crust (see chart below), catalyzing the era of ‘high analysis’ phosphate fertilizers and establishing the phosphate fertilizer industry near veins of P-rich rock. (https://acsess.onlinelibrary.wiley.com/doi/abs/10.2134/agronmonogr46.c25). (https://www.tfi.org/wp-content/uploads/2017/07/p-past-history-and-contributions-to-the-globbal-food-supply.pdf) Most industrially produced P fertilizer today is blended with other nutrients, notably N and potassium (K), creating the world famous NPK fertilizer blend.

 

Throughout the 19th and 20th centuries, deposits were discovered all across the planet, and by sheer luck the northwestern African nation of Morocco sits on around 66-75% of the world’s P reserves. China, which controls a little over 5%, comes in second place, followed by Algeria and Syria. The rest are dotted across the globe in smaller pockets. (https://www.theatlantic.com/science/archive/2016/11/the-desert-rock-that-feeds-the-world/508853/) Despite sitting on far fewer reserves than Morocco, China leads the world in phosphate production with 90 million metric tons (MT) produced in 2023. Morocco comes in second with 35 million metric tons of the fertilizer in 2023, down from 39 million MT in the previous year. However, capacity expansions are expected to be completed in 2026, meaning phosphate output is expected to increase in Morocco in the near future. (https://revenueagenda.com/top-10-phosphate-countries-by-production-updated-2024/) The United States rounds out the top three with an estimated 20 million tons of marketable phosphorus fertilizer, according to the U.S. Geologic Survey. (https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-phosphate.pdf) All together, it’s estimated that 264 million tons of phosphate-rich rock are set to be mined in 2024. (https://www.statista.com/statistics/1288972/global-phosphate-rock-production-capacity/)

United Nations Food and Agriculture Organization (FAO) data show that global P fertilizer consumption more than tripled from 4.6 to 17.5 Tg P yr−1 (0.4 to 1.2 g P m−2 cropland yr−1 on average) between 1961 and 2013. (1 Tg = 1,102,311 tons)

Global P Fertilizer Consumption (1961-2021)

Companies profiting from P fertilizer

According to the U.S. Geologic Survey phosphate rock ore was mined by five companies at nine mines in four States and processed into an estimated 20 million tons of marketable product, valued at $2 billion, free on board (f.o.b.) mine in 2023. (https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-phosphate.pdf) Florida is home to global giant Mosaic (NYSE:MOS), which is one of the largest phosphate producers in the US. A significant portion of this
phosphate is produced by PhosAgro subsidiary Apatit from apatite minerals at the Khibiny deposit, which is located east of Finland in Russia’s Kola Peninsula. Phosphate operations are also found in Perm Krai at the Oleniy Ruchey apatite mine and processing facility owned by the Acron Group’s North-Western Phosphorous Company. (https://revenueagenda.com/top-10-phosphate-countries-by-production-updated-2024/) Demand for phosphate fertilizers had created a US$54.6 billion market by 2023, and that figure is expected to grow at a compound annual growth rate of 5.3 percent through 2030 to reach US$78.4 billion. Existing rock phosphate reserves could be exhausted in the next 50–100 years (Steen, 1998, Smil, 2000b, Gunther, 2005). The fertilizer industry recognises that the quality of reserves is declining and the cost of extraction, processing and shipping is increasing (Runge-Metzger, 1995, Driver, 1998, Smil, 2000b, EcoSanRes, 2003)” “While phosphate rock seemed like limitless source of highly concentrated phosphorus, it was relying on a non-homogenous, non-renewable resource. Today, societies are effectively dependent on phosphorus from mined phosphate rock. Without continual inputs, we could not produce food at current global yields (Cordell, 2010)” (https://www.researchgate.net
publication/51040734_A_brief_history_of_phosphorus_From_the_philosopher%27sstone_to_nutrient_recovery_and_reuse) Peak P and concerns that it is just a longer, slower burning guano. Cordell et al. 2009: “This paper outlines how humanity became addicted to phosphate rock, and examines the current and future implications of this dependence on a non-renewable resource. Global demand for crops will continue to rise over the next half century, increasing the demand for phosphate fertilizers. However, modern agriculture is currently relying on a non-renewable resource and future phosphate rock is likely to yield lower quality phosphorus at a higher price.”

 

Peak P. Nature and Properties of Soil page 693.

Thankfully, C, H, O and N are abundant on the planet, but Earth minerals like P are far less abundant. Many are classified as “rare Earth minerals” for this reason. Even so, the search for and mining of earth minerals to use as fertilizer has exploded over the past 150 years.

Potassium (K), the third of the NPK triumverate, is unique to P in that it is relatively abundant in soils as a common constituent of clay mineral. K is second only to N in terms of uptake by plants from the soil. Unlike P, the total amount of K in the soil is large. Even so, its availability is still quite low, meaning that it limits plant productivity. Only N, P and probably Sulfur (S) limit productivity more. (NPS pg 695) This doesn’t mean K is available to life, but it does mean there is a lot of opportunity for it to weather away and become available. While K is an integral building block of soil particles, living organisms don’t incorporate it into the structures of their organic compounds like N and P do. Rather, K is needed to activate  over 80 enzymes that build or break down essential compounds. The K content of normal, healthy leaves is 1-4%, on par with N, but ten times greater than P. Potash mines…

 

Global K Fertilizer Consumption (1961-2021)

Country reserves and output of potash

Reserves (https://www.statista.com/statistics/604174/distribution-of-potash-reserves-worldwide-by-select-country/)

Production (https://investingnews.com/daily/resource-investing/agriculture-investing/potash-investing/top-potash-countries-by-production/)

 

Companies profiting from potash

Nutrien( TSX:NTR,NYSE:NTR), the world’s largest potash company, is based in the Canadian prairie province of Saskatchewan. It was born from a 2018 merger between two major crop nutrient companies, Potash Corporation of Saskatchewan and Agrium. The deal created “a global agricultural giant” now valued at more than US$38 billion. Today, the company has six operating potash facilities in Saskatchewan, Canada. The world’s largest potash mine, the Mosaic Company’s (NYSE:MOS) Esterhazy K3 operation, is located in Saskatchewan and capable of producing nearly 8 million MT of the fertilizer each year. Additionally, BHP’s aforementioned Jansen potash project will provide a significant increase to the country’s production capacity once it comes online. (https://investingnews.com/daily/resource-investing/agriculture-investing/potash-investing/top-potash-countries-by-production/)

 

Overall fertilizer statisticsIn the mid- to late 1940s, about 2 million tons of chemical fertilizers were used per year by American farmers. By 1960, over 7 million tons were applied annually and by 2014, that number rose to 20 million tons per year. (https://cropwatch.unl.edu/fertilizer-history-p3) How to feed the world page 152:  “When expressed in terms of pure nutrients, by 2020 global agriculture has been applying annually nearly 100 million tons of N, about 20 million tons of P and 30 million tons of K.”

 

Top Fertilizer companies worldwide

(https://finance.yahoo.com/news/15-largest-fertilizer-companies-world-123548121.html)

Global use of nitrogen, phosphorus and potassium fertilizer from 1961-2020.
Global synthetic N,P,K + organic N fertilizer use (1961-2019)

Pesticides history and increased usage

Global pesticide use, broken down by product type. (1990-2021)

Needless to say, companies are making beaucoup bucks off of these agrochemical sales. That makes sense, but what many people may not know is that only a select few companies produce and sell the majority of agrochemical products that sustain modern agriculture. Acquisitions and mergers in the past few decades have left this space even more consolidated, the “Big Six” recently became the “Big Four”. Dow and DuPont merged to become Dow DuPont in 2015 (later becoming Coretva Agriscience), ChemChina acquired Syngenta in 2016 and Bayer acquired Monsanto in 2016. These three agribusiness mergers alone have concentrated control in the agrochemical/seed market into the hands of an oligarchy comprised of Bayer, BASF, Corteva, and Chem-China, providing them with the ability to exert an enormous amount of influence on the agrochemical and seed industry. (https://www.ocf.berkeley.edu/~prb/the-big-six-to-the-big-four-the-rise-of-the-seed-and-agrochemical-oligopoly/) For example, Bayer and Corteva now control approximately 70% of the corn and soybean seed market in the U.S., a significant increase from around 40% two decades ago, according to USDA data. (https://www.agweb.com/news/business/taxes-and-finance/corteva-now-beating-out-bayer-companys-market-share-surges-soybeans) As a farmer or rancher, does this consolidation of power and influence make you feel more or less confident in the free market to set fair prices for your chemicals and seed?

Mergers and acquisitions of the "Big Six".
Market Shares for U.S. corn, soybean and cotton retail seed, 2018-2020. Corteva and Bayer—provided more than half the U.S. retail seed sales of corn, soybeans, and cotton during that period. Courtesy of USDA-ERS.

Financially, the Big Four are doing very well. In 2023, Bayer’s gross profits were $30.1 billion (https://www.macrotrends.net/stocks/charts/BAYRY/bayer/gross-profit), BASF’s were $18.0 billion (https://www.macrotrends.net/stocks/charts/BASFY/basf-se/gross-profit) and Corteva’s were $7.3 billion (https://www.macrotrends.net/stocks/charts/CTVA/corteva/gross-profit). At the time of writing, BASF is seeing revenue fall in 2024 as high energy prices have hurt sales and profit.(https://www.ft.com/content/4e8699a2-dd69-489e-a1b9-543000109957) Another agrochemical giant, Bayer, reports their Crop Science arm saw a”significant decline in sales and earnings against very strong prior year, mainly due to lower glyphosate prices.” (https://www.bayer.com/sites/default/files/2024-03/bayer-annual-report-2023.pdf) Finally, Corteva Agriscience sales and profits have also been underwhelming (https://www.corteva.com/content/dam/dpagco/corteva/global/corporate/files/press-releases/01.31.2024_4Q_2023_Earnings_Release_Graphic_Version_Final.pdf). Corteva appears to be weathering the storm well, however, as Chief Executive Officer at CORTEVA INC, Charles V. Magro made $13,234,872 in total compensation in 2023. Of this total $1,341,923 was received as a salary, $1,472,175 was received as a bonus, $2,050,001 was received in stock options, $8,200,042 was awarded as stock and $170,731 came from other types of compensation. (https://www1.salary.com/Charles-V-Magro-Salary-Bonus-Stock-Options-for-Corteva-Inc.html) Many more of their executives make well over $1 million annually as well.

 

Corporations that specialize in fertilizer production also appear to be thriving financially. Nutrien, the largest soft rock miner and potash producer in the world and North America’s second largest phosphate producer, recorded over $1 billion in net income for 2023 and over $7.6 billion in net income in 2022. (https://www.macrotrends.net/stocks/charts/NTR/nutrien/gross-profit) The Mosaic Company, a Fortune 500 company based in Tampa, Florida which mines phosphate, potash, and collects urea for fertilizer, brought in a net income of $1.1 billion in 2023 and $3.5 billion in 2022. (https://www.macrotrends.net/stocks/charts/MOS/mosaic/net-income)

 

On the whole, it appears that agrochemical and seed sales won’t be slowing down anytime soon. Mordor Intelligence writes that, “The North America Agrochemicals Market size is estimated at USD 37.91 billion in 2024, and is expected to reach USD 46.36 billion by 2029, growing at a CAGR of 4.10% during the forecast period (2024-2029).” (https://www.mordorintelligence.com/industry-reports/north-america-agrochemicals-market)  Globally, “the Agrochemicals Market size is estimated at USD 253.29 billion in 2024, and is expected to reach USD 308.17 billion by 2029, growing at a CAGR of 4% during the forecast period (2024-2029).” (https://www.mordorintelligence.com/industry-reports/agrochemicals-market) Many, if not most, farming and ranching ecosystems have become so degraded that they now rely on these inputs to keep them productive, meaning that abatement of chemical use is not advised in most cases. Ecosystems need to be weaned off of them just as a person with addictions to certain substances need to be weaned off slowly to avoid severe withdrawal symptoms. Sri Lanka’s massive organic movement failure is evidence of what can go wrong when inputs are forbidden basically overnight. Unfortunately, not many large-scale producers have begun this transition away from high input use, which means sales of agrochemical products
will only increase as land is pushed harder to produce enough food for a growing world population.

North American agrochemical market projections, 2024-2029. Courtesy of Mordor Intelligence.
Global agrochemical market projections, 2024-2029. Courtesy of Mordor Intelligence.

Finally, fossil fuels are an extremely important input for modern day farmers and ranchers, as of writing this in 2024. Whether it’s natural gas needed to create nitrogen fertilizer or diesel fuel used to power heavy equipment, fossil fuels are the lifeblood of conventional agriculture, and society as a whole. The 18,983.557 barrels of oil consumed every day as of December 2023 speak for themselves. (https://www.ceicdata.com/en/indicator/united-states/oil-consumption) American farms are a relatively small percentage of total consumption, however they still spent $16.5 billion dollars in direct fuel expenditures in 2023. (https://www.nass.usda.gov/Charts_and_Maps/Farm_Production_Expenditures/arms3cht7.php) That’s a lot of the green stuff for the black stuff. The (sort of) good news is that the United States is producing record amounts of crude oil, to the tune of 12.9 million barrels a day. (https://www.eia.gov/todayinenergy/detail.php?id=61545#:~:text=Crude%20oil%20production%20in%20the,%2Fd%2C%20set%20in%202019.) So, running out of oil shouldn’t be one one of the things keeping farmers up at night… at least not for a while, unless problems arise from extraction to fuel tank.

 

Unless you live under a rock, you probably don’t need to be told that oil companies are doing quite well financially, but here are some recent figures. Oil companies took a financial hit during the pandemic, but they’ve come roaring back since lockdown orders were lifted. In fact, the top five US-based oil and gas companies by market cap, according to S&P Global — ExxonMobil, Chevron, ConocoPhillips, EOG Resources and Schlumberger — brought in more than $250 billion in profits between 2021 and 2023 under the Biden administration. That’s a 160% jump compared to the first three years of the Trump administration, according to calculations by CNN. (https://edition.cnn.com/2024/06/11/economy/oil-industry-profits-under-biden/index.html) This isn’t meant to be a political statement, but rather a statement proving this country’s addiction to energy, regardless of which party is in the White House.

US oil production, 2023.

There aren’t many activities that humans undertake every day for the entirety of their lives. Unlike air for breathing, food isn’t free, so there is a lot of money to be made in agriculture. The industry that provides inputs like machinery, agrochemicals, seeds and energy are certainly using this fact to their advantage, at least financially speaking.

 

Next, let’s take a look at whether or not a rising tide is lifting all boats. Are producers themselves faring well as agriculture has become increasingly industrialized?

Farmers & Ranchers

The previous section illustrated that the industry dedicated to selling products to farmers and ranchers is doing pretty well economically. Let’s now turn our attention to the farms and ranches buying their products. Are these businesses also faring well in the current industrial agricultural system? What about rural life in general? Are farmers, ranchers and their communities experiencing a golden age of health and wealth? The answer to these questions, as always, is complicated. One thing for certain is that the number of farms, ranches and workers on these operations has continually shrunk in the past two centuries, even as national populations have risen dramatically. If there’s one theme running through this whole article it’s that consolidation and concentration have taken hold of agriculture all along the chain. This is the natural outcome of an industry that chooses to operate by the economies of scale model, so it should come as no surprise to anyone what’s happened. Whether this is a good or bad result is up to you to decide.

 

According to the USDA, the number of American farms peaked at 6.8 million farms in 1935, at which point it began to decline sharply until the early 1970s. The number of farms decreased during this period primarily due to growing productivity and increased non-farm employment opportunities. Since 1982, the number of American farms has dropped much more slowly than the period from 1935-1975. The most recent USDA survey indicates the number of farms is still shrinking, as there were 1.89 million U.S. farms in 2023, which is down 7% from the 2.04 million reported in the 2017 Census of Agriculture. Similarly, the amount of land used for agriculture follows a downward trend. Total farmland decreased from 900 million acres in 2017 to 879 million acres in 2023. (https://openoregon.pressbooks.pub/envirobiology/chapter/9-3-conventional-agriculture/) This is partially due to urban and suburban sprawl swallowing up productive farmland. In fact, since 1970, over 30 million acres have been lost to development. 

American farms, land in farms, and average acres per farm, 1850-2023. Courtesy of USDA-ERS.

While the number of farms has decreased, the size of the remaining farms has increased. The USDA writes that, “Cropland has been shifting to larger farms. The shifts have been large, centered on a doubling of farm size over 20-25 years, and they have been ubiquitous across States and commodities. But the shifts have also been complex, with land and production shifting primarily from mid-size commercial farming operations to larger farms, while the count of very small farms increases.” (https://www.ers.usda.gov/webdocs/publications/45108/39359_err152.pdf?v=7180.1) Livestock operations have also shifted toward higher concentrations of animals per farm, especially for the hog and dairy industry. (https://www.ers.usda.gov/webdocs/publications/44292/13804_eib43b_1_.pdf?v=7781)  Census data shows that the average farm size was 464 acres in 2023, which is up 5% (441 acres) from 2017. (https://www.reuters.com/world/us/number-us-farms-falls-size-increases-census-shows-2024-02-13/).  Given that mid-sized farms are making way for increasingly large farms while the number of small farms increases, the minor increase in average farm size is likely deceivingly small. A more important statistic is that the proportion of productivity from large-scale farms has increased greatly in recent decades. Since 1990, small and medium-sized farms have gone from producing nearly half of all agricultural products in the US to around a third in the 2020’s. (https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/farming-and-farm-income/). Currently, the USDA estimates that the 105,384 farms with sales of $1 million or more sold more than three-fourths of all agricultural products and accounted for 85% of the market value of agricultural production. (https://www.usda.gov/media/blog/2010/05/18/small-farms-big-differences) (https://www.nass.usda.gov/Newsroom/2024/02-13-2024.php) Models show that global trends will likely follow the same path as more nations adopt economies of scale agriculture, with one estimating the number of farms decreasing “from the current 616 million (95% CI: 495–779 million) in 2020 to 272 million (95% CI: 200–377 million) by the end of the twenty-first century, with average farm size doubling.” (https://www.nature.com/articles/s41893-023-01110-y)

 

Miraculously, total farm production nearly tripled between 1948 and 2017, even as the number of farms, farmland and farm labor declined. The USDA states that the growth in farm output is “largely due to innovations in animal and crop genetics, chemicals, equipment and farm organization.” (https://www.usda.gov/media/blog/2020/03/05/look-agricultural-productivity-growth-united-states-1948-2017) Globally, agriculture has experienced a similar upward trend in productivity and it’s estimated that between 70% and 90% of the recent increases in food production are the result of the adoption of conventional agriculture rather than greater acreage under cultivation. (https://openoregon.pressbooks.pub/envirobiology/chapter/9-3-conventional-agriculture/)

American farm size and their share of production by farm type, 2022. Courtesy of USDA-ERS.
U.S. Agricultural Output, Inputs, and Total Factor Productivity, 1948-2021. Courtesy of USDA-ERS.

Consolidation of farms also means that fewer Americans are working in the agricultural sector. Changes in U.S. jobs by sector from 1850-2015 reveals that the employment share of agricultural jobs has fallen by 56% during that time. (https://www.visualcapitalist.com/visualizing-150-years-of-u-s-employment-history/) From 1960 to 2022 alone, agricultural jobs have gone from making up 8.3% of all American jobs to 1.6% in 2022. (https://tradingeconomics.com/united-states/employment-in-agriculture-percent-of-total-employment-wb-data.html) Future outlook for agricultural jobs shows that this downward trend won’t change direction anytime soon. According to the Bureau of Labor Statistics, the number of agricultural  jobs is set to decline an additional 2% during the ten-year period between 2022-2032. (https://www.bls.gov/ooh/Farming-Fishing-and-Forestry/Agricultural-workers.htm)

 

Globally, the percentage of employees working in agriculture is dropping quickly as well. In 1991, 43% of employees worldwide worked in agriculture in some form or fashion. Today, that number has dropped to 23%. (https://data.worldbank.org/indicator/SL.AGR.EMPL.ZS) A full list of nations and their employment numbers can be viewed here, courtesy of the World Bank.

Graph depicting the share of US jobs by sector from 1850-2015.
Change in U.S. jobs by sector from 1850-2015 shows that the employment share of agricultural jobs has fallen by 56% during that time.

The decrease in farms and agricultural jobs isn’t necessarily a good or bad outcome. After all, statistics cannot imply “good” and “bad”. What they show is simply the direction most of the world’s economies have chosen, and fair enough to them. Promises of food security and material wealth made by conventional agricultural systems are hard to turn down, especially when the system does result in a massive increase in output. There’s also something to be said for creating a system that provides more individuals with the freedom to choose a career path outside of subsistence farming. It’s likely that the job you currently hold was chosen because it interested you, not because you had to produce immediate basic needs for you and your family. That’s something to be thankful for.

 

Even so, it’s probably worth asking how many millions of farmers and farming families were happy that their businesses didn’t survive the transition to industrial agriculture. Farming isn’t everyone’s passion, of course, and many families were undoubtedly excited to find new lives in cities and towns that offered the prospect of well-paying industrial and service-based jobs. However, it’s also true that there existed many passionate farmers who were forced off of land that their families had farmed for generations because they could not adapt to the changing agricultural system. One could argue this is simply how the business world works: survival of the fittest. However, something feels different about agriculture compared to other industries in this regard, largely because humans throughout history have lived with an intimate connection to the land that grows their food. Therefore, it’s likely that we’ve forfeited an integral part of ourselves by breaking our relationship with natural ecosystems en masse. This isn’t to say that pre-industrial agriculture was an idyllic paradise and societies should have eschewed anything resembling technological progress. Nostalgia for the “good old days” of agriculture can easily be overblown. But the fact is that politicians and industry leaders have let everyone know from the beginning that the march toward an increasingly industrial agricultural system is simply inevitable no matter how many farms are forced out of the industry. It’s simply the self-proclaimed Law of Butz: adapt or die.

 

Case in point, R. Douglas Hurt, a Purdue University history professor who specializes in agriculture, said in 2023 that, “Farms probably will get larger and become fewer in number in the years ahead. This is not necessarily a problem. Small-scale family farms are not more economically viable or more moral than large corporate farms, most of which are family corporations for tax purposes.” (https://www.politifact.com/factchecks/2023/nov/07/joe-biden/did-americans-lose-the-farm-fact-checking-joe-bide/) Leaving aside the brushed-off assumption that large corporate farms are just as moral as small-scale family farms, there is a serious risk in food production falling in the hands of a fewer businesses. The recent COVID-19 pandemic revealed just how vulnerable the current food production, processing and transportation system is to unforeseen events. (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9335023/) Bottlenecks all along the chain, particularly in the meat processing plant sector (https://www.nytimes.com/2020/04/18/business/coronavirus-meat-slaughterhouses.html), create stress points that leave consumers at higher risk of shortages on supermarket shelves. The same risks are present with the increasing monopolization of food production, particularly when considering that major disease outbreak increases as plants and animals of the same species are placed in close proximity. Of course, there are risks and rewards with every system, but the risk of placing such a basic human need in the hands of fewer individuals who live further away from their consumers is, at the very least, something to ponder.

 

Hearkening the spirit of Rusty Butz, Sonny Perdue, while Secretary of Agriculture in 2019, echoed Hurt’s stance when he told an audience at a dairy expo in Wisconsin that, “In America, the big get bigger and the small go out. I don’t think in America we, for any small business, we have a guaranteed income or guaranteed profitability.” Perdue went on to say that, “It’s very difficult on an economy of scale with the capital needs and all the environmental regulations and everything else today to survive milking 40, 50, or 60 or even 100 cows.” (https://www.cbsnews.com/news/agriculture-secretary-sonny-perdue-says-family-farms-might-not-survive/) Exactly. The current production model that farmers were pushed to adopt requires such a large amount of capital that farmers need to produce an enormous amount of product to justify their large capital investments to keep up with the rest of the herd. Many farms simply can’t afford to keep up the pace in that race and they have to drop out, providing more land for surviving farms to divvy up. Theoretically, then, surviving farms should be making more profit and the farming community as a whole should be performing just as well because each farm has that much more money to put into their local economies. Is that what has happened?

 

First, consider that farming is a business unlike any other, as president John F. Kennedy rightly pointed out.

President John F. Kennedy at the 1960 national plowing contest in Sioux Falls, South Dakota.

Not many other industries play a game where the rules are so tilted against them. What it boils down to is that farmers playing the commodity game are at the mercy of several variables outside of their control. COVID and Russian invasions being recent examples. Contrast that to a normal business, like the sandwich chain Subway. Remember the $5 footlong introduced in 2007? Why is that no longer around? According to journalist Kelly Corbett, “Subway’s $5 footlong sandwich promotion, which was introduced during the dawn of a recession, could not withstand rising costs, and naturally, the price had to go up.” (https://www.distractify.com/p/what-happened-to-five-dollar-footlongs) That’s how most businesses operate. They raise the price of their product when it costs more to produce it.  Commodity farmers? Not so much. Farmers can’t increase the price of commodity goods, even when it costs them more to make the same amount of product. So if input prices go up, farmers and ranchers have to deal with it in ways other than raising the price of their goods. Thankfully, U.S. Bureau of Labor Statistics data show that commodity prices have risen over time.

Producer Price Index by Commodity for Farm Products from 1913-2024. Courtesy of the Federal Reserve Bank of St. Louis.

Unfortunately, farmers don’t put commodity prices into their bank accounts. They put net farm income into their bank accounts, and this metric varies widely year to year. In fact, at the time of writing in 2024, estimates show that farm income is likely to take the biggest hit since 2006. (https://www.farmprogress.com/farm-business/2024-farm-income-to-face-biggest-annual-decline-since-2006) One reason is inflation, even though “the relationships between inflation and commodity prices are not strong.” (https://farmdocdaily.illinois.edu/2022/06/inflation-and-commodity-prices.html) Price is mostly determined by supply and demand. Input prices, on the other hand, are significantly correlated with general inflation, with machinery and labor following closer to inflation than feed, seed, fertilizer, and fuels. (https://ag.purdue.edu/commercialag/home/resource/2023/10/trends-in-general-inflation-and-farm-input-prices-202310/)  This has spelled trouble in the cattle, hog, and broiler markets, as “prices have not kept pace with inflation over the past 30 years.” (https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/agricultural-production-and-prices/) In the grain market, “Prices could average well below the current break-even levels of $4.73 per bushel for corn and $11.06 for soybeans (see farmdoc daily, December 21, 2021). Lower prices will likely occur in the future because of above-trend yields increasing supply.” (https://farmdocdaily.illinois.edu/2022/06/inflation-and-commodity-prices.html) Purdue University’s most recent Crop Cost and Return guide estimates the following earnings per acre for commodity grains grown in average productivity soils in the state of Indiana: Continuous corn: -$178, Rotation corn: -$79, Rotation Soybeans: -$1, Wheat: -$183 and Double Crop Soybeans: $240. (https://ag.purdue.edu/commercialag/home/paer-article/2024-purdue-crop-cost-return-guide/)

 

The point being made is not that 2024 is shaping up to be a rough year financially, although this is significant. The overarching point is that over the long-term the industrial agricultural system has incentivized the small fish to get eaten by the medium and large fish. Now, the conditions are right for the medium fish to get eaten by the large fish. One would think that the surviving medium farms would have been much more profitable as they swallowed the small ones, but many are still struggling to pencil in a profit year after year. This shows that focusing on producing an enormous amount of product for a gradually increasing price is not a winning strategy in commodity agriculture. Yield, pounds of animal sold and higher prices are not all of the variables in the equation of profitability. The cost of producing goods also has to be factored in before net profitability can be established. In addition, interest payments on “necessary” operating loans are an input cost that farmers of old didn’t have to contend with, so farmers of today really can’t afford a bad year or, heaven forbid, a string of bad years financially. USDA’s Economic Research Service forecast in 2022 that total farm sector debt will increase to a record high $535 billion in 2023. As a share of production expenses, interest expenses are the third largest (7.4%). Interest expenses are the fastest growing farm production expense, increasing 19.1% in 2023 and 33.2% in 2022. Fortunately, debt-to-equity ratios remain fairly low thanks to increasing land values, which represent 84% of total farm sector assets in 2024. (https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/assets-debt-and-wealth/)

 

Another metric worth investigating that affects net profitability is the commodity farmer’s share of the food dollar. Commodity farmers are essentially price takers, not price makers. Sadly for them, their share of the food dollar is at an all-time low in the U.S. at 14.5 cents. (https://www.agweb.com/news/business/taxes-and-finance/farm-share-us-food-dollar-hit-record-low-what-does-mean-producers) Even worse, American food producers as a whole industry receive a little more than 7 cents for every nominal food dollar spent in 2021. (https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=105572&cpid=email)  Similar statistics are observed the U.K. (https://www.sustainweb.org/reports/dec22-unpicking-food-prices/) Economists believe this is largely due to more meals eaten at restaurants and more restaurant meals delivered to homes. The graph below shows that the farmer’s share of the food dollar has been decreasing the fastest as restaurants take more of the food dollar. (https://www.ers.usda.gov/webdocs/publications/44825/7759_err114.pdf?v=0) In general, the more hands that touch a product between harvest and consumer, the less of the food dollar a farmer or rancher will see.

 

Share of Food Dollar by Industry, 1993-2016. Food services like restaurants have increased greatly since 2010 while farm production experienced the biggest decline. Courtesy of USDA-ERS.

Overall,  U.S. net farm income has remained relatively static in the period from 1970-2024. This in spite of the fact that there are roughly 350,000 fewer farms in 2024 than in 1970. Average net profitability per farm is incredibly difficult to calculate and average because farms vary in many ways, including farm size, product raised and location. With that said, the median household income from farming in the United States from 2012-2022 was at or below $0 each year. (see graph below) This is likely biased toward the lower end by the fact that so many farms are small and hobby farms, and these farms don’t make money on average. Nevertheless, off-farm income is the main source of income for many farming families, big and small.

 

A more complete breakdown of median farm household income can be found from the USDA here.

Inflation adjusted U.S. Net Farm Income, 1970-2024. Courtesy of USDA-ERS.
Median Household Income from Farming by Selected USDA, ERS Resource Regions, 2012-2022.
Percent of Farm Households with Positive Farm Income and Their Median Share of Total Household Income from Farming, 2022. Courtesy of USDA-ERS.
Farm and ranch profitability is important to many people in rural economies, not just producers and their families. When farms and ranches struggle economically, so do their local communities. Unsurprisingly, articles which give a grim depiction of rural American life with titles like “Most of America’s rural areas are doomed to decline” and “Small-town America is Dying. How can we save it?” are all too common. There’s no doubt that fewer farms and fewer farmers play a role in the economic woes of rural America, but there is another important factor at play. Think about all the capital that farmers must invest to produce a crop or animal product. Normally, more spending stimulates an economy. The problem with modern, commodity agriculture is that a substantial portion of the money they’re spending isn’t pumped back into their local economy. More and more money is going to increasingly consolidated large corporations located somewhere far away from Main Street, leaving less and less money to go around in rural communities. No wonder young people have left for urban and suburban areas in droves. Jayson Lusk, a food and agricultural economist at Oklahoma State University, reports that in 1900, just less than 40% of the total U.S. population lived on farms, and 60% lived in rural areas. By the mid-2010s, about 1% lived on farms and 20% lived in rural areas. To Purdue professor R. Douglas Hurt, the reason for this mass exodus is quite simple. “Young people leave the farm for better jobs and more money. They have been doing this since the 1870s.” (https://www.politifact.com/factchecks/2023/nov/07/joe-biden/did-americans-lose-the-farm-fact-checking-joe-bide/) Census data from 2000-2020 shows that many rural counties in states like West Virginia, Illinois, Arkansas, Kansas, and Nebraska have seriously decreased in population over that time. Seeing the data on a map is one thing, but listening to real-life stories of rural degradation is another. Check out this installment of the “Soil Carbon Cowboys” series on Youtube, titled “one hundred thousand beating hearts” to see how industrial agriculture played a role in making Clay county, Georgia one of the poorest counties in the U.S and what farmer Will Harris is doing to revitalize his local community.
U.S. Population Change by County, 2000-2020

Individuals who choose to stay in rural communities face many of the same challenges as their urban neighbors. However, outcomes are often worse for rural citizens, as in the case of public health. Dr. Macarena Garcia, a senior health scientist in the CDC’s Office of Rural Health, points out that, “There is a well-described, rural-urban divide in the United States, where rural residents tend to be sicker and poorer and to have worse health outcomes than do their non-rural peers.” (https://abcnews.go.com/Health/rural-americans-higher-risk-early-death-urbanites-cdc/story?id=109742216) One reason for this is that rural areas are often lacking in various resources, which purely comes down to available money. (https://time.com/6980243/classism-rural-america-essay/) Local funding for health and social services is determined primarily by an area’s overall wealth, tax base, and fiscal policies, and many rural communities have a low and declining tax base. (https://journals.sagepub.com/doi/abs/10.1177/109114210002800402) Concerning agricultural workers, long-term exposure to chemicals like pesticides is associated with various negative health outcomes, such as an increased risk of brain cancer (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8431399/), Parkinson’s Disease (https://www.tandfonline.com/doi/abs/10.1080/1059924X.2017.1317684), and prostate cancer (https://www.sciencenews.org/article/farm-harm-ag-chemicals-may-cause-prostate-cancer).

 

The two-decade increase in opioid mortality is also concerning because it hit rural communities especially hard. Interestingly, opiate deaths have corresponded with significant economic stressors in some rural areas, as rural labor markets are less diversified than urban ones. This makes them more vulnerable to economic shifts when downturns occur. (https://carsey.unh.edu/publication/opioid-crisis-rural-small-town-america) Silently, another crisis has infected rural communities: the mental health crisis. Farmers have suicide rates much higher than the general population, with elevated mental health symptoms and high stress levels. (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10896109/) One report claims that American farmers are 3.5 times more likely to commit suicide than the general population. (https://www.agweb.com/news/business/health/startling-reality-rate-suicide-among-farmers-35-times-higher-general) Farmer suicide rates are so high that the USDA is offering mental health training to professionals working in farming communities. (https://eu.usatoday.com/story/news/nation/2024/06/15/farmer-suicide-usda-mental-health-training/74076743007/) Family therapist David Brown, leader of one of the mental health sessions, explained some of the unique challenges that farmers face to the audience. He noted that, “current owners feel that if they fail, they would be letting down their grandparents, parents, children, and grandchildren.” He also said that, “farmers’ fate hinges on factors out of their control. Will the weather be favorable? Will world events cause prices to soar or crash? Will political conflicts spark changes in federal agricultural support programs? Will a farmer suffer an injury or illness that makes them unable to perform critical chores?” (https://eu.usatoday.com/story/news/nation/2024/06/15/farmer-suicide-usda-mental-health-training/74076743007/) Tethering profitability to the increasingly unpredictable world is a risky way of doing business, but it’s the model that farmers and ranchers were pushed to adopt. Unfortunately, too many of them lose hope that external factors will improve and their situation will turn around.

 

All of these factors, and many others, resulted in a difference in life expectancy as much as 5 years higher, on average, between wealthy and poor counties in the United States. (https://www.ers.usda.gov/amber-waves/2020/may/extreme-poverty-counties-found-solely-in-rural-areas-in-2018/). A significant number of those poor counties are rural. (https://ajph.aphapublications.org/doi/full/10.2105/AJPH.2020.305728) Health and wellness, it turns out, might just depend more on a person’s zip code more than their genetic code. (https://hms.harvard.edu/news/zip-code-or-genetic-code) Yet, the disparity in rural health is almost paradoxical. One would think rural citizens would have cleaner air, cleaner water and better access to fresh fruits, vegetables, milk and meat seeing as they don’t live in crowded concrete jungles. And yet, a large portion of rural America is a food desert, meaning there is a lack of nutritious foods in the very places blessed with some of the most fertile soils in the world. And yet, places like “Cancer Alley” exist in rural Louisiana. (https://www.businessinsider.com/louisiana-cancer-alley-photos-oil-refineries-chemicals-pollution-2019-11?op=1) And yet, so many farmers, who get to work with nature and all its mysteries and wonders, are miserable to the point of suicide.

 

Obviously, the industrialization of agriculture and society writ large has brought many positives to rural America. Life expectancy has risen 25 years from 1920-2020. (https://www.statista.com/statistics/1040079/life-expectancy-united-states-all-time/) Many, if not most, towns have a hospital, a grocery store and K-12 schoolhouses. Most rural households have cars, electricity, indoor plumbing, refrigerators, Wi-Fi, satellite TV and all the rest of the amenities that city folk enjoy. Most would say this is a good thing. Wendell Berry might not be so quick to take that stance, but most people would. Even so, many rural towns and counties across the nation are experiencing serious economic, health, environmental and social declines. Industrial agriculture is not the cause of every one of these problems, but to say that this system has only brought positives to the world would be equally false.

 

The content of this article gravitates strongly toward North American agriculture, so it’s also worth mentioning that farmers around the globe are affected by agricultural policy from world leaders like the United States, China and Brazil. One such example is the glut of products produced from Green Revolution technology and the forceful lifting of tariffs in the late 20th century to allow for the flooding of global markets with these cheap products. The path to hell is often paved with good intentions, and this policy likely hurt just as many farmers worldwide as it helped. This is because they can’t compete on a global market with subsidized products from the U.S. and China. One such example is the policy that allowed American-grown “Miami rice” to flood Haitian markets. This policy greatly hindered Haiti’s domestic rice production, leaving their population at greater risk of hunger when markets fluctuate or disasters strike. Former President Bill Clinton apologized in 2010 for this policy in front of a Senate Foreign Relations Committee, saying, “since 1981, the United States has followed a policy until the last year or so, we started rethinking it, that we rich countries that produce a lot of food should sell it to poor countries and relieve them of the burden of producing their own food so, thank goodness, they can leap directly into the industrial era. It has not worked. It’s maybe been good for some of my farmers in Arkansas, but it has not worked. It was a mistake. It was a mistake that I was a party to I am not pointing the finger to anybody. I did that. I have to live every day with the consequences of the lost capacity to produce a rice crop in Haiti to feed those people because of what I did. Nobody else.” (https://www.youtube.com/watch?v=RSE9wKUAMS8&t=84s (1:20)) Check out “The New Breadline” by Jean-Martin Bauer of the World Food Programme to learn more about the complicated world of food policy, conflict and outcomes for farmers in less fortunate situations.