Ammonium Phosphates         

*Thousands of short tons per year (100 percent P₂O₅ basis) of diammonium phosphate (DAP) and monoammonium phosphate (MAP). Approximately 70 percent of product is DAP. Commercial processes react anhydrous ammonia with phosphoric acid, and vary the ammonia to acid ratio between 2 and 1, to obtain the desired product.

In November 2002, Cargill Fertilizer purchased the assets owned by Farmland Hydro, including its ammonium phosphates plant in Bartow, Fla., with a rated capacity of 485,000 tons. Farmland Hydro was a limited partnership owned equally between Hydro Agri North America and Farmland Industries. Farmland Industries had filed a Chapter 11 petition last May. SF Phosphates is a 50:50 joint venture owned by J.R. Simplot and Farmland Industries. This asset, however, was not included in Farmland’s Chapter 11 restructuring. Since 1999, Cargill Fertilizer, however, has reduced operating rates at its facilities in Bartow and Riverview Fla., by 275,000 metric tons because of adverse market conditions.

Mulberry Phosphates closed its two plants in Florida in 2001 at Mulberry and Piney Point. Their combined capacity amounted to 660,000 tons. Also in 2001, Agrifos filed for Chapter 11 protection, but the company is still operational. Agrifos is 15 percent owned by Mitsui Co.

The PCS Phosphates White Springs, Fla. DAP plant has been idle since January 2001. The plant is now being readied for start-up in January 2003 as a result of the improving export market, and will bring back 320,000 tons of capacity to the marketplace.

Near the end of 1999, IMC Phosphates permanently closed its Nichols, Fla. plant, eliminating 255,000 short tons of capacity. Earlier that same year, the company’s plant at Taft, La., with 455,000 tons of capacity, was idled for seven months. IMC Phosphates Company is a joint venture between IMC Global Inc. and Phosphate Resource Partners LP.

Mississippi Phosphates is a subsidiary of Mississippi Chemical Corp.

Profile last published 12/14/99; this revision 11/18/02.

DEMAND
2000: 4,200 thousand short tons; 2001: 4,080 thousand short tons; 2005: 4,590 thousand short tons, projected. Demand equals production plus imports (2000: 137 thousand short tons; 2001: 196 thousand short tons) less exports (2000: 4,640 thousand short tons; 2001: 4,370 thousand short tons).

GROWTH
Historical (1996 - 2001): -1.5 (negative) percent per year; future: 3 percent per year through 2005.

PRICE
DAP: Historical (1996 - 2001): High, $195 per ton, fertilizer grade, min. 18 percent N, 46 percent P, bulk, c.l., f.o.b. Fla. works; low, $119 per ton, same basis. Current: $138 to $140 per ton, same basis.

MAP: Historical (1996 - 2001): High, $220 per ton, fertilizer grade, min. 11 percent N, 52 percent P, bulk, c.l., f.o.b. Fla. works; low, $125 per ton, same basis. Current: $144 to $146 per ton, same basis.

USES
Fertilizer, 98 percent (DAP, 70 percent; MAP, 23 percent; other solid ammonium phosphates, 5 percent); industrial uses, 1.5 percent; animal feed, 0.5 percent.

STRENGTH
Corn accounts for 41 percent of fertilizer use by crop, so corn plantings are a key driver for US fertilizer demand. The USDA’s June 2002 Plantings Report showed corn plantings increased by 4.1 percent to 78.9 million acres in 2002. Soybean plantings are expected to decline in 2002 and offset some of the increase in corn plantings. Total US crop plantings are estimated at 326.9 million acres in 2002, or about a 0.6 percent increase compared with last year.

The US is a mature fertilizer market. Total DAP/MAP demand has remained between 4.0 and 4.5 million tons over the last decade. Demand declined by 3 percent in 2001 but is expected to recover in 2002 due to an increase in corn plantings. The increase in 2002 US fertilizer demand is forecast at 2.5 to 3.5 percent.

Demand should remain near this level or increase slightly in the medium term due to the new Farm Bill, which will support crop prices near current levels through favorable loan rates.

The export market is getting stronger. In addition to resumed strong import growth to China, several other countries have entered the DAP market for imports, including Pakistan and Mexico.

WEAKNESS
DAP capacity utilization rates have slipped since the 1990s, when rates were around 95 percent. In early 2001 the current rate was about 75 percent, based on the installed capacity at the time. Since then, the permanent elimination of approximately 10 percent of the industry’s production capability has improved this figure considerably.

The important export market (typically 55 percent of US production) also suffered a supply shock in 2001 as two new large DAP plants in began operating overseas. Oswal Chemicals and Fertilizers opened a 675,000-ton plant in India, and Western Mining brought on a 450,000-ton facility in Australia.

OUTLOOK
The DAP market is tightening, chiefly the result of increased DAP shipments to China and other international markets in 2002, which are expected to be at least 35 percent more than last year. Pricing has been firming as well. Industry participants believe this is the first year of a multiyear recovery in the global DAP market. Industry restructuring has eliminated more than 900,000 tons of capacity from the market place, helping to bring back into balance, the previously oversupplied situation. Anticipated improvements in farm prices will encourage increased crop plantings and consequently, increased fertilizer usage. Growth for the forecast period is 3 percent annually.

HISTORICAL DATA