7 Biggest Nitrogen Fertilizer Manufacturers in America

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The 7 biggest nitrogen fertilizer manufacturers in America are among some 30 companies that operate production facilities across the United States. Even though there are so many companies and the biggest nitrogen fertilizer manufacturers alone produce millions of tons of fertilizers, the U.S is still a net importer, as it imports between 2 million and 3 million tons of ammonia annually.

There are two main reasons that explain why the U.S has to import nitrogen fertilizers. The first is the high demand, as nitrogen fertilizer is required in larger quantities than fertilizers made from the other two main nutrients, and the second is the high cost of production. However, as natural gas prices in the U.S have been low over the last couple of years, more production facilities across the country have been built, allowing biggest nitrogen fertilizer manufacturers in America like CF Industries Holdings, Inc. (NYSE:CF), Potash Corporation of Saskatchewan (USA) (NYSE:POT), and Terra Nitrogen Company, L.P. (NYSE:TNH) to supply the largest share of the fertilizer market in the country.

Nitrogen fertilizer is a type of mineral fertilizer that is made from ammonia, which in itself can be used as a fertilizer, but is often used to manufacture other types of nitrogen fertilizers. Ammonia is produced through a Haber-Bosch process, which involves natural gas (chemical formula CH4) that provides the hydrogen, while the nitrogen is obtained from the air. Through the process, ammonia (NH3) is created and is used for the production of urea and other fertilizers. Therefore, because the production of nitrogen fertilizers requires high quantities of natural gas, it is one of the main cost drivers for the price of fertilizers and is also why many companies, including the biggest nitrogen fertilizer manufacturers in America, choose to build manufacturing facilities in countries with historically low natural gas prices.

As stated earlier, nitrogen is required in higher quantities than the other two main nutrients. This is because nitrogen is the most important out of the three so-called “macro nutrients”, the other two being phosphorus and potassium. Nitrogen is directly responsible for the crop size, as compared to the other two, which impact the crop quality. According to the International Fertilizers Association, in 2015/2016, there were around 181 million tons of fertilizer consumed, 60% of which were nitrogen fertilizers. Moreover, nitrogen fertilizers require being added every year, as opposed to phosphorus and potassium. These factors highly benefit the biggest nitrogen fertilizer manufacturers in America.

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The biggest nitrogen fertilizer manufacturers in America will likely benefit from higher demand, as the world is tackling global warming and greenhouse gas emissions. The production of ammonia is an energy intensive process and has a big carbon footprint. China, which uses coal-based ammonia, has one of the highest footprints. At the same time, China is one of the leaders at tackling greenhouse gas emissions and plans to reduce the capacity of its ammonia plants. At the same time, European companies, which have historically faced tougher regulations and higher energy prices, have invested heavily in making the process as energy-efficient as possible, providing their plants with catalysts that reduce emissions. In the U.S, the situation regarding regulations is rather uncertain at the moment, judging by the “efforts” of the current administration, but companies also have the possibility to upgrade their facilities in order to tackle climate change. At the same time, one of the regions with the highest demand growth is expected to be South America, so biggest nitrogen fertilizer manufacturers in America and other smaller manufacturers stand to benefit due to their geographical proximity.

Having said that, let’s take a closer look at the 7 biggest nitrogen fertilizer manufacturers in America, some of which are also among the 11 biggest fertilizer companies in the world. To compile this list, only the biggest nitrogen fertilizer manufacturers in America with manufacturing facilities in the U.S were taken into consideration. As a criterion for these nitrogen fertilizer manufacturers, we took into account only the quantities of ammonia that were manufactured at their U.S facilities during these companies’ latest fiscal years, with the data having been reported in the companies’ 10-K reports with the Securities and Exchange Commission (all included companies are public).

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