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Fertiliser industry

by  Ants Roberts

Phosphorus, nitrogen and potassium are essential elements in New Zealand’s economy: in the form of natural or artificial fertiliser, they boost the growth of crops, pasture and forest plantations.


What is fertiliser?

Fertiliser is a solid or liquid material that is applied to a soil to make it more fertile, and therefore boost plant growth.

Promoting faster growth

Most soils contain some nutrients and can support plant growth even if it is very slow. But when faster growth is important, as in farm crops and pasture, then so long as soil moisture levels are satisfactory, fertiliser will be needed.

Early farmers added compost, animal manure, or dried and ground animal blood and bone to the soil. Other sources were nutrient-rich rocks, which were finely ground and applied directly as a fertiliser, or mixed with chemicals to make a form more easily used by plants.

Nutrients

Natural fertilisers consist of decomposing organic matter (plant and animal tissue). This contains carbon, hydrogen and oxygen, and a number of other mineral elements or nutrients. The major elements are nitrogen, phosphorus, potassium, sulfur, calcium, magnesium and sodium. Trace elements (needed in only very small amounts) are boron, iron, manganese, copper, zinc, molybdenum, chlorine, cobalt, iodine and selenium.

Some elements may not be needed for plant growth, but may be important for the nutrition of grazing animals.

Industry history: 1860s onwards

The fertiliser industry began in New Zealand in 1867 when the first importation of guano (accumulated seabird droppings) arrived in the country for use on farms. This was at a time when nutrients from the ash of forests burnt during land clearance had run out, and crops and pastures started to fail.

Superphosphate

A lack of phosphorus was soon identified as the main deficiency on most soils. In 1880 the first shipment of superphosphate, a phosphorus-rich fertiliser, was imported by W. E. Ivey (director of Lincoln School of Agriculture, now Lincoln University).

Local production of superphosphate followed in 1882, at the Kempthorne, Prosser & Company plant near Dunedin. In 1884 the New Zealand Manure and Chemical Company began production at Mt Maunganui in the Bay of Plenty.

Downwind of the docks

In the 1870s, sulfur was mined from Whakaari (White Island) in the Bay of Plenty. It was then processed at a factory near the Mt Maunganui docks, and the smell (likened to rotten eggs) was such that the place was named Sulphur Point. It is near the current site of the Ballance Agri-Nutrients superphosphate plant.

Expansion

From humble beginnings of less than 50,000 tonnes in 1885, manufacture and use of superphosphate grew to around 2 million tonnes in the mid-1960s, and reached a peak of 3.1 million tonnes in 2001–2. There was a brief setback when government subsidies on fertiliser were removed in 1984–85. Use dropped from 2.2 million tonnes that year to 1.2 million tonnes in 1985–86.

The industry expanded to five major companies with manufacturing works in such diverse places as Whāngārei, Morrinsville, New Plymouth, Mt Maunganui, Napier, Nelson, Christchurch, Timaru, Dunedin and Invercargill.

Fewer companies

Production efficiencies, takeovers and cyclical downturns in the rural economy have transformed the industry. In 2007 it consisted of:

  • two 100% farmer-owned manufacturing and importing cooperatives – Ballance Agri-Nutrients (making superphosphate at Whāngārei, Mt Maunganui and Invercargill), and Ravensdown Fertiliser (operating in Napier, Christchurch and Dunedin). They have about 94% of market share.
  • a smaller importer, Summit Quinphos (with headquarters in Auckland and nationwide distribution points), with about 6% of market share.

The industry today

The fertiliser industry is one of a number of service industries that underpin the largest sector of the New Zealand economy – agriculture and forestry. Nearly 14 million hectares of the total New Zealand land area (26.7 million hectares) is used for pastoral agriculture, arable and fodder cropping, or production forestry. The greatest area of arable land is under grazed, permanent pasture.

From early days, the fertiliser industry provided mostly superphosphate (made in New Zealand) and potash (potassium chloride) imported from France, Germany or Canada, for use on pasture.

Clover for nitrogen

The nutrients in superphosphate are phosphorus, sulfur and calcium. These promote vigorous growth of clover, which is one of the species that grows well in New Zealand pasture.

Nitrogen, another important nutrient, is lacking in superphosphate – but is provided by clover in a special way. Rhizobium bacteria form nodules on clover plant roots and convert nitrogen in the soil atmosphere into a form available for grass growth. This is a very inexpensive means of providing nitrogen for pasture growth.

Urea fertiliser for nitrogen

Since the early 1990s, farming costs and the value of land assets have increased much more rapidly than income from the sale of produce. Farmers have had to produce much more from their land. Backed by research trials, they have found that, compared to clover, man-made nitrogen fertiliser could produce more pasture at critical times of the year.

The main nitrogen fertiliser is urea, which contains 46% nitrogen. Its use has greatly increased since the 1990s, particularly on dairy farms.

In 1982, New Zealand’s only ammonia urea plant was built at Kapuni in South Taranaki. The fertiliser is made from natural gas from the offshore Māui gas field. The plant was part of Prime Minister Robert Muldoon’s ‘Think Big’ policy of industrial development.

Initially run by Petrochem, in 1992 it was sold to the Bay of Plenty Fertiliser Co-operative (now Ballance Agri-Nutrients). In 2008, they manufactured 260,000 tonnes of urea fertiliser annually, some of which was used in non-agricultural industries. At least that amount is also imported by the fertiliser cooperatives.

Rising from the dead

The observation in England that plants grew well in church graveyards led to the early use of ground-up bones as a phosphorus fertiliser. The bones were collected from the ancient battlefields of Britain and Europe.

Changing demand

In 1979, superphosphate dominated the market. But by 2003, this had declined and use of urea and diammonium phosphate had surged, while potash sales remained static. Responding to changing demand from farmers and growers, the industry produces or imports a much greater range and quantity of multi-nutrient products today.

Alternative fertilisers

Many niche businesses make, import or sell alternative fertilisers. These are derived from raw materials such as crushed rock phosphate, marine clay, micro-organism preparations, worm compost and other waste materials or by-products. The value of these materials should be judged on their chemical content.


The role of fertiliser companies

Sourcing products

Ballance and Ravensdown are companies that manufacture single superphosphate (without extra ingredients) on behalf of their farmer shareholders, from the raw ingredients of elemental sulfur and rock phosphate. Both companies import these raw materials – most rock phosphate comes from North Africa, and the sulfur mainly from Canada, where it is a by-product of the petrochemical industry.

All three major fertiliser companies (Ballance, Ravensdown and Summit Quinphos) import other products from around the globe – such as compound NPK fertilisers from Norway and Holland; potassium chloride (potash) from Canada and Germany; sulfate of ammonia from Canada and Australia; and urea from Malaysia and the Arabian Gulf.

Reactive rock phosphate is imported mainly by Summit Quinphos, from North Africa and the Middle East. Reactive rock phosphate differs from the rock phosphate used for manufacturing superphosphate in that it is able to be dissolved by the acids in soil and so can be applied directly to pasture without any chemical processing.

Buying and importing these materials and manufactured products means that the companies have expertise in the global fertiliser market, in contract negotiation, international shipping, and hedging against currency fluctuations – most contracts are transacted in US dollars.

Big business

In 2007 annual sales of fertiliser products from New Zealand’s three major suppliers totalled around $1 billion. Fertiliser price rises in 2008 increased this substantially.

Cooperatives

Ballance and Ravensdown are 100% farmer-owned cooperatives: their customers are also the shareholders. The main focus is on gaining the best price in the purchase, manufacture and supply of fertilisers to shareholders, and where possible to enhance profitability with new products and services.


Products and services

Superphosphate products

New Zealand’s two main fertiliser companies – Ballance Agri-Nutrients and Ravensdown – produce a variety of solid superphosphate fertilisers, usually granulated.

Superphosphate contains phosphorus, sulfur and calcium. Potassic superphosphate has potash blended in. For sulfur-deficient regions, elemental sulfur is added – with or without potash.

Other elements that may be added are:

  • magnesium
  • trace elements such as molybdenum, copper and boron for plant growth
  • selenium, copper, cobalt or sodium for animal growth.

When extra nitrogen is required, ammonium sulfate (but not urea) is blended with superphosphate. Mono-ammonium and diammonium phosphate are blended with granular ammonium sulfate and potash, to form fertilisers with different nutrient combinations for use on a variety of pastoral, arable or fodder crops. The more expensive compounds imported from Europe are used on high-value export and domestic horticultural crops, and on export vegetables.

Ravensdown Fertiliser owns (wholly or jointly) several quarries that extract lime, used as a soil conditioner. It also supplies animal health supplements such as magnesium, calcium and sodium, as well as trace elements, agrochemicals and anthelmintics (for internal parasites).

Ballance Agri-Nutrients sells mostly through the farm-servicing agencies such as Wrightsons PGG, Farmlands and RD 1, whereas Ravensdown and Summit Quinphos deal directly with their farmer customers.

Services

To supply fertiliser throughout the country, the companies maintain a network of stores. These hold stockpiles of the main product lines for local farmers, or use local carriers to take them to the farm. The companies also transport products from ports or manufacturing works to their clients, ensuring there is a consistent supply around the country.

Ballance and Ravensdown own aerial topdressing companies (SuperAir and Wanganui Aero Work respectively) and Ravensdown has several joint ventures with companies that spread fertiliser from trucks.

All three companies employ graduates in agriculture, horticulture or resource management, or ex-agricultural servicing personnel as their sales staff. These field officers or technical sales representatives are the main link between the farmer or grower and the company.

Field officers advise farmers on soil, plant and animal nutrients. To create fertiliser programmes, they use soil, plant and animal tissue tests, historical information about nutrient use, data about the farms and productivity, and farmers’ business goals. Computerised models are used, with digitised farm-mapping tools to help create and document fertiliser recommendations. GPS (global positioning system) records show the path of the aircraft or trucks applying the fertiliser.

Effect on the environment

Public concern is increasing over the decline in water quality as a result of pollution from soil loss, nutrient runoff and leaching from mostly animal excreta. The companies need to be aware of the impact of fertilisers on water quality, and to develop nutrient management plans that allow farmers to gain the desired level of productivity while minimising nutrient loss to surface and ground water.


Research and quality assurance

Research and development

The Ballance and Ravensdown fertiliser companies jointly fund and manage the Fertiliser Association of New Zealand.

The Fertiliser Association funds research into the agricultural and environmental effects of fertiliser use. It promotes sustainable land use and environmental protection, in conjunction with the government, regulatory bodies, industry members, research organisations and farmer representative groups. It has created the Code of Practice for Nutrient Management – with emphasis on fertiliser use. This aims to ensure that when fertiliser is used properly, it will not harm the rural environment, food or animals.

Fertiliser companies also individually fund research that will yield business or environmental benefits for customers. The recent development of nitrification inhibitors for treating grazed pastures to reduce nitrate leaching from urine spots (Ravensdown, Ballance) and urease inhibitors applied on urea to decrease ammonia volatilisation (Summit Quinphos) are recent examples of this.

Use with care

Fertiliser is described as a ‘contaminant’ under the Resource Management Act 1991. In 2008 fertiliser use is a permitted activity, but in future farmers may need resource consent from their regional council each time they wish to use fertiliser.

Quality assurance

To protect farmers, the Fertiliser Act 1980 stipulated the amount of certain ingredients in fertilisers. However, the act was repealed in the early 1990s. In 1992 the Fertmark programme was set up to independently assess fertiliser quality, so that farmers could be assured of the nutrient content of fertilisers they used.

Similarly, the independently audited Spreadmark scheme certifies those operators who apply fertiliser according to specific standards.

Both schemes are administered by the New Zealand Fertiliser Quality Council, incorporated in 2001. The council consists of representatives from Federated Farmers, FertResearch, member companies (with registered products), the research community, the New Zealand Institute of Primary Industry Management, and the Ground and Aerial Fertiliser Spreading Associations.


External links and sources

More suggestions and sources


How to cite this page: Ants Roberts, 'Fertiliser industry', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/fertiliser-industry/print (accessed 17 September 2019)

Story by Ants Roberts, published 24 Nov 2008