Genus plc Business Reports

Demand for agricultural chemicals depends mainly on demand for various crops, which in turn depends on crop prices. The profitability of individual companies is linked to efficient operations and marketing. Big producers have large economies of scale in production. Smaller companies can compete effectively by making specialty chemicals or fertilizer mixtures for local markets. The industry is capital-intensive: annual revenue per employee is about $1 million. International trade in fertilizers is large, because phosphate rock and potash are available in only a few countries. The high product value makes bulk shipping costs relatively unimportant. The relative cost of natural gas (for nitrogen fertilizers) has a large effect on trade. The US is usually a net importer of fertilizer, largely due to limited domestic supplies of nitrogen and potash. Canada, Trinidad and Tobago, and Russia are the leading sources of US fertilizer imports. The US is a net exporter of pesticides.