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One of the most significant industries in our state is agriculture. Within that industry are many different but oftentimes connected businesses. For example, within the next couple of months, we’ll see acres and acres of corn and soybeans in farm fields everywhere. A very high percentage of those row crops are used for feedstocks to support another important ag business in Delaware: the poultry industry. But for the moment, let me focus on row crops and how disruptions to energy supplies will undoubtedly have ripple effects across the economy.
Corn, soybeans, and many other crops grown in Delaware are fertilizer-dependent. There are a few broad categories of fertilizer, but among the most important for corn and soybeans are nitrogen fertilizers such as urea, ammonia, and ammonium nitrate — all of which are made from natural gas. Soybeans primarily require potassium and phosphorus fertilizers, with potash playing a very important role as well. Western Canada is a major source of this critical resource. For a closer look at how global conflicts are impacting fertilizer supply and agriculture, watch this brief video.
While I have greatly simplified a few things here, the obvious takeaways to this message are the twin challenges we are experiencing with supplies of natural gas (Qatar in particular), and potash (Canada and trade relations). Like any business, when input prices are in short supply or unstable, the ripple effects are likely to reveal themselves in the coming months.
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