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Artificial Constraints in the Fertilizer Industry

Welcome to Corn Comments, I’m DaNita Murray, Executive Director at South Dakota Corn. We are brought to you by the South Dakota Corn Utilization Council, a volunteer group of farmers who promote corn marketing in this state, the US and around the globe.

Recently, a company commented publicly that for the fertilizer industry, “The artificial injection of artificial constraints into supply-and-demand fundamentals never really works very well”.

In this subsector, the few number of participants likely constitutes at the least some degree of market failure and that concentrated market power means the supply and demand curves of concern are already fairly meaningless. It’s also worth noting that almost any regulation, tariff, license, etc. is an artificial constraint. So, a specific warning against increased transparency, considered an important component for supply and demand to actually function properly, leads to the question of whether manufacturers already know that there is a significant failure of information in the fertilizer marketplace.

Stay tuned for more updates on this and other important topics.