The Global Supply of Potash Is Highly Concentrated

This is Tim Hammerich of the Ag Information Network with your Farm of the Future Report.

Trade tensions directly impact the farm economy and not just in the prices of what farmers produce. Domestic farmers are also reliant on foreign suppliers of critical ag inputs like potash. Brazil Potash CEO Matt Simpson says the global supply for this critical mineral is concentrated in just three countries, none of which are the U.S.

Simpson… “ Potash is highly concentrated in, in three countries, being Canada, Russia, and Belarus, they supply over 80% of the world's sea born potash. And arguably, when you look at Russia and Belarus they used to collude on selling up until about 2010. But there's still a lot of intertwining between those countries. And in Canada you have what's called Canpotex, which is a legal cooperative that the different companies collude together in, in selling the product. So you're really limited as a farmer in terms of where you can buy this product from. And countries like Brazil are 98% import dependent, not too different than the US which is 95% import dependent. So Canada, you could say is a comfortable supplier, a trustworthy one. But it is concerning to think that the rest of the potash comes from Russia and Belarus and there is no alternate that has scale to displace that today.”

Simpson says this puts farmers in a vulnerable position, which is one reason he is developing another source of the mineral in Brazil. And he says this is another reason to be concerned about rising trade tensions and their impacts on the farm economy.