Phosphate, Supply Chains & the 2027 Fertilizer Shock

AgCast is back — with new vigor but the same goal: bringing farmers and agricultural leaders together for conversations about the ideas, businesses, and decisions shaping the future of agriculture.

In the first episode of the new season of AgCast, Chad Fiechter and Todd Kuethe sit down with Hunter Swisher, CEO and founder of Phospholutions, to explore one of the most important — and least understood — challenges facing modern agriculture: phosphate fertilizer.

Phosphorus is essential for crop production, but it’s also a finite resource controlled by a handful of countries around the world. As fertilizer prices remain a major concern for farmers, this conversation breaks down what’s happening behind the scenes — from phosphate mining and global shipping routes to fertilizer production, supply chain disruptions, and what it could mean for farmers heading into future growing seasons.

Hunter explains how Phospholutions is working to improve phosphate fertilizer efficiency, why traditional MAP and DAP fertilizers lose much of their value after application, and how new technology could help farmers produce more with fewer inputs.

Chad and Todd also discuss: • Why fertilizer supply chains are more complicated than most farmers realize • How global events can impact input availability and prices on the farm • Why fertilizer innovation has been slower than other areas of agriculture • What farmers should understand about phosphate availability heading into 2027 • The future of ag technology, startups, and solving problems across the food system

AgCast brings farmers and agricultural leaders together for conversations about the ideas, businesses, and decisions shaping the future of agriculture.

Topics: fertilizer prices, phosphate fertilizer, MAP fertilizer, DAP fertilizer, farm inputs, agriculture supply chains, crop production, ag technology, farm profitability

Episode Transcript

(00:00):
For me it was the OPEC of thefuture was what I was told.

(00:02):
The OPEC of the future is gonna beabout phosphorus, not petroleum.
And I was pretty dumbfounded.
I mean, phosphate, it'sthe backbone of your DNA.
It's, it's the, you know, ATP, right?
The thing that transfersenergy through your cell.
Like, it is in every livingthing in substantial quantities.
It is a critical n- nutrient, and, andwe're just dumping it in the bottom of
the ocean, uh, in a very linear fashion.
Hey, everybody.
Welcome back to AgCast.

(00:24):
This is Chad Fiechter.
and I'm pumped because,I got my buddy back.
Todd, where you been?
Hi.
Todd Kuethe.
and I've been on sabbatical.
What
is sabbatical?
That's a great question.
people are outside of academia, it'sgonna sound like the biggest, gimmick,
rigged system ever, and that's … 'causein some ways it kinda feels like it is.

(00:44):
So the idea is-
Don't say that.
I, well, I know, but I, I, I-
It's okay.
It's okay
… feel like I have to admit what-
Yeah
it is first and acknowledge that, right?
Which is, it's incredible perk of beinga professor, in a, in a tenured faculty
role, which is every seven years youget the chance to have some time off, to

(01:05):
focus on your professional development.
So basically they say, "What do youneed to work on to get better at your
job in a way that also benefits theuniversity? And we'll clear that space,
and you can have that time." So I taughton a program called Semester at Sea.
About 480 college students and 30faculty members living on a ship,

(01:26):
as we traveled from 10 countries,starting in Asia, working our way
around Africa, and ending in Europe.
And, when the ship was moving,I taught economics class.
I taught three classes.
You would take classes intensively,and then you'd hit some country,
and it's like you're free to travel.
And then, after about six days ofthe country, then you get back on the
ship, and it'd be, you know, anotherlike eight to 10 days of teaching

(01:50):
and, and learning and then back.
So, it was a wonderful experience.
I learned a ton.
I'm still processing it.
But I am more than anything'cause today is one of those days
when Indiana weather is perfect-
Oh, yeah
… and it's beautiful.
We only get so many of these days.
I agree.
I wish we had more, but today'sone of those, and I'm like it just
feels great to be back in Indiana.

(02:12):
The question I have, though, is anyreflections as they pertain to our podcast
as we get ready to introduce, our guest?
I think from being gone for so long,traveling around, meeting all these new
people, seeing different parts of theworld, again, what initially ignited us
was, our curiosity about the ag sector andwanting to have interesting conversation

(02:33):
with interesting people, and now I'mlike, "Oh, man, there's interesting
dimensions I haven't even thought aboutbefore," and it's like, " I'm ready to
dive back in." That's what I'm getting at.
Okay, that's perfect because we'regonna be talking to Hunter Swisher.
He's the CEO of a company calledPhospholutions, and they make a
fertilizer product that, to be totallyhonest with you, we didn't really know
much about prior to the conversation.

(02:55):
Well, and you, at least, havespread fertilizer professionally
in your days managing a farm.
Correct.
I am still under the world that,fertilizer comes in a giant bag that
you push a little cart in your yard,and it puts it out on the grass.
So, I know even less.
But we got a chance to, learn aboutphosphorus and what the heck that does,

(03:17):
but also Hunter is really interestedin the idea of, f- literally physically
moving stuff around the world, right?
He has a shipping map of shipping routes-
Yeah
… and shipping lanes.
And talking about, phosphorus productionas, a mining activity, and then that
has to get processed and then movedto somewhere where someone else farms.
.Okay, so we, we are joined by, a fun guest, Hunter Swisher.
Hunter, do you wanna introduceyourself to our audience?

(03:38):
Yeah, sure.
My name's Hunter Swisher.
I'm the CEO and founder at Phospholutions.
Happy to be here.
Hunter, you, you have an interesting job.
Can you tell us about the company youwork for in, in your current role?
Yeah, sure.
I, I mean, I think first and foremost I'lltell you a little bit about the company.
So, company's called Phospholutions.
We are a, I would say later stagestartup company, so been around,

(04:03):
actually just celebrated our10-year anniversary back in April.
So I've officially been doing this forabout a third of my life, which is a
little, little crazy to think about.
essentially what we do is, is we focuson improving phosphate fertilizer
efficiency, and really start all theway at the top by trying to, integrate
a technology that we developed over thelast decade to, essentially control the

(04:23):
release of phosphate from fertilizer.
So we integrate this upstreaminto production when we're making
our commodity phosphate products.
it allows the producer to reducethe cost of fertilizer production.
On the flip side, when thatfertilizer's used on farm, it's
more of what we apply actually getsinto the crop, meaning we can apply
less, therefore farmers save money.
So really, one of the uniquesolutions out there that fully

(04:45):
integrated across the value chain.
Everybody makes more money using less.
And myself personally, mybackground's in plant sciences.
I had the opportunity to study atPenn State University, as an undergrad
where, you know, we formed the companyand spun out, with a few patents, and
then have, developed a portfolio since.
But really been on a mission to,to bring this thing globally.
So currently today we sell inpretty much all the Americas from

(05:07):
Canada down to, to Argentina, andcontinue to expand internationally.
Phosphate is a finite resource.
So it is unequallydistributed around the world.
It is a mined resource.
It's something that's builtup over millions of years in
just a few select regions.
Actually, 70% of the world'sphosphate reserves are located
just in the country of Morocco.
Yeah, it's, it's a little, little,little crazy to think about.

(05:30):
This is the second largest nutrientneeded for food production worldwide.
And here in the US, we, we are blessedto have reserves, but those are
dwindling in the next few decades, andwe'll be 100% reliant on importing,
phosphate, from places like Russia,China, Saudi Arabia, Morocco, to really
meet our, our agricultural needs.
So it's a pretty alarming fact.
But essentially, y- you mine rock, youattack that rock with sulfuric acid

(05:54):
to convert it to phosphoric acid, andthat is the baseline for all of our
commodity phosphate products today.
Most widely used, monoammonium,diammonium phosphate.
As you could probably imagine,don't have to be a chemist.
Ammonia, phosphoric acid, you makethose two products, and you use
those as essentially the fertilizergranules you'll see applied on, on
all the farm fields around the world.
And essentially, that'show it's made today.

(06:15):
What we do is, is essentially wemine and process a separate mineral,
that essentially gets converted intoour active ingredient, which is a
powder, and that powder goes upstreaminto production at the same time
phosphoric acid and ammonia are beingreacted to form a fertilizer granule.
So instead of a coating, it's actuallyintegrated fully into the fertilizer
granule, not coated around it.

(06:36):
And essentially what happens is,is that phosphoric acid is reacting
with the surface of our mineral-and binding to the surface.
And then that mineral helps controlthe release of it out of the granule
once it's applied to the soil.
The alternative is, is these commoditysources, we call them MAP or DAP in, in
the industry, they release very quickly.
And the challenge there is that whenphosphate releases, in the soil in,

(07:00):
in a matter of, you know, days toweeks after the application, then it
releases completely and reacts withthe soil, and essentially gets bound
up, and the plant can't access it.
So our whole focus is, is try todose out that phosphate in a more
controlled manner, more based onplant needs throughout the season,
so a higher percentage of what weget actually gets into the crop.
And it's crazy to think about as I tellyou about, you know, how critical this

(07:22):
resource is, that as little as 10% ofwhat we apply in the year of application
actually u- actually gets used by the crop
Wow.
So then does it stick around?
You're, you, you have it st- itstays in the soil as, as sort of
a bank, or is it all just sort ofleaching the, the, the, the, the…
what we're not using efficiently?
Yeah, it's, it's a mixture of both.

(07:43):
Majority of it stays around.
And the, the challenge here is thatalthough it's, it stays in the soil,
there's a portion of what we applyevery year that is irreversibly bound.
It's not coming loose.
It's not getting absorbed by the plant.
And, and even the stuff that isreversibly bound, I mean, it's not like
a, it just comes back out next year.
I mean, it takes a decade ordecades to fully release back out.

(08:04):
And so we essentially have to continueto apply way more than the crop needs
to build in the soil and almost saturatethe soil to get it to a point where you
start to see an improvement in efficiency.
And, and, and that leadsto the leaching aspect.
You know, you think about a sponge.
You fill that sponge upcompletely full of water.
Every drop you put in, a drop leaches out.

(08:25):
And so this idea of, you know, you'vegot all this, this phosphate in the
soil, it can't really be utilized bythe crop very easily, and the second
you get a rain event, it either runsoff or surface erosion happens, and you
just continue to lose, 6% every yearof all that phosphate that you've been
storing in the bank, and it's just not avery efficient, kind of practice today.
So then your solution there is moreavailable in the immediate term?

(08:51):
And then w- talk about sortof, that time decay of, of
what, what your solution does.
Yeah.
So rather than having to overapplyor oversaturate the soil, we like to
say we feed the plant, not the soil.
And so a much higher percentage of whatactually gets onto the farm field in
that year of application is availableto the plant to actually access

(09:12):
because we pre-bind it to this mineralso that when it gets applied to the
soil, it's not binding to the soil.
We've essentially optimized the surfacechemistry of this mineral to be able to
allow for that release to happen, in amuch more reversible fashion, in a way
that the plant can actually tap into andpull off the surface all season long.
And so again, more of what you apply getsinto the crop, so you can apply much less.

(09:35):
I mean, we see that our farmers inrow crop production apply, as much as
50% less phosphate per acre in the,and get the same or better yields.
Wow.
And where… And so y- you're, this,this, the genesis is Penn State.
So where is the… where are theareas where you're seeing the most
use of your product currently?

(09:57):
Yeah, the interesting part is, is thatbecause we are a chemistry approach, not
biological, we are controlling the releaseof the fertilizer from the actual granule.
It's working pretty agnosticof crop and soil condition.
And so we see pretty consistentperformance worldwide.
I mean, we have, partnerships and fieldtrials in 19 countries around the world.

(10:21):
And, and today we primarily sell amajority of our product through Canada,
the US, and now Brazil, with a bigfocus on also unlocking, Latin America.
And, and doing somework in Europe as well.
Good.
We've done trials in India.
We've done trials in Africa.
Do you market directly tofarmers or are you working with
existing, suppliers of inputs?

(10:42):
How are you getting thisout there into the field?
That's what I'm curious about.
Yeah.
So our business model is wework with suppliers to, to
mine and process our mineral.
We then work with phosphate manufacturersthat essentially toll for us.
So we send our raw material, they make thefinished product, and then we sell that
finished product through distribution.
Yeah.
And so the, the real beautiful partabout the solution is it's made,

(11:07):
shipped, stored, sold, and applied theexact same way as commodity phosphate.
We just use less.
And so what a… It's such acritical, critical piece of ag
technology to fit seamlesslyinto farmers' current practices.
It, it just makes adoption so muchmore difficult when you are trying to
change something on the farm or theway they buy it or the way they use it.

(11:29):
Yeah.
You're in the system.
It's just the same system,just, yeah, you're selling-
Just better fertilizer.
Yeah.
Yeah, sure.
Yep.
And I think at some pointI, I shifted into wanting to
pursue starting Phospholutions.
And, and I think it reallyhappened in a classroom learning
about the, the phosphate issue.
And, and for me it was somethingwhere, like this is pretty astonishing

(11:51):
that, that, you know, the OPEC ofthe future was what I was told.
The OPEC of the future is gonna beabout phosphorus, not petroleum.
And I was pretty dumbfounded.
I mean, phosphate, it'sthe backbone of your DNA.
It's, it's the, you know, ATP, right?
The thing that transfersenergy through your cell.
Like, it is in every livingthing in substantial quantities.
It is a critical n- nutrient, and, andwe're just dumping it in the bottom of
the ocean, uh, in a very linear fashion.

(12:13):
And so I was very passionate, like, "Well,we gotta, we gotta solve this. Uh, and,
and nobody really knows about this." Whenwe started Phosphorus Solutions, it's
been the same mission the entire time.
We believe that sustainableproduction and responsible use of
phosphorus is absolutely criticalto meet a growing food demand.
It's, it's been the same missionstatement for, for 10 years.
And our approach has been it startswith improving fertilizer efficiency.

(12:35):
And, and I think, you know, my visionof that business has, has always been
kind of sustainability driven first.
You know, we, we know that thisis a, a dwindling resource.
We know it's causing massive,massive environmental issues when
it runs off in the environment.
We know farmers are just wastingmoney, and we just can't do it.
it's a national security interest.

(12:56):
I mean, it's just beendesignated a critical mineral.
This is a, this is a big dealand, and not a lot of people
in the public know about it.
And so that mission has always driven us.
But when it comes down to buildingthe product, I've always had the
view that if this doesn't makeeconomic sense for a farmer- Then the
sustainability mission doesn't matter.
And so we spent a lot of yearsand a lot of venture capital, tens

(13:17):
of millions of dollars buildinga product that sold itself.
Then we get to feel really proudand good about the fact that it
accomplishes the mission that we'restill focused on as a business.
My perceptions of the fertilizerindustry is that there's incumbents,
strong sort of resistance todoing things a different way.

(13:40):
And you're saying you're going andprocuring, commercially mined rock.
And then, and then you have someonewho's, who's doing the work for
you to formulate it into a product,right, that is also just slightly
different than the commerciallyavailable options that are the same.
Talk about the process of, gettingthese big institutional players,

(14:02):
getting them on board with, beingpart… letting you integrate into the
supply chain, 'cause I would assumethat was a very difficult process.
Yeah.
Yeah, it, it, it, it was, and it continuesto be… And I think the, the reality
is, is that the fertilizer industryis, is, is not known to be innovative.

(14:25):
And, and when you look at other aginputs, you know, it is-- we are like
an order of magnitude lower in termsof the amount of R&D expenditures
as a percentage of revenue.
Fertilizer industry's like lessthan 0.5% of revenue goes back in.
And the reason being is these commodities,they've been around for 60 years.
You know, it's, it's, it-we produce it the same way.
It's just how do youoptimize a little bit more?

(14:45):
How do you get a little bit more efficientor a better supply chain position to
be more competitive in the market?
Scale, economy of scales, you know.
We're riding the commodity cycles.
Sometimes it's good years,sometimes it's bad years.
And so the strategy never reallyincludes doing something different.
And by the way, they're soupstream that it's so disconnected
from the realities on farm.
But, you know, I participate in a few,boards, advisory boards, et cetera,

(15:08):
within the industry, and it's changing.
I, I, I do believe it's changing.
I think that there's a lot of incumbentsthat, that are, are resistant to change
and adoption, and then there's tho- thereare those that are leading the pack.
And I think that the ones that areleading see that the way the world's
moving in terms of food security, interms of sustainability, in terms of

(15:30):
efficiency, is that measuring successbased on the number of tons that we
produce and sell needs to shift to thevalue we generate per unit of nutrient.
And so our solution allows for aphosphate producer to get more out,

(15:55):
more value out per mined resource.
And so the reason why that happens,it's not so self-explanatory without
being in the industry, but, butthe idea is that when we make our
product, we have to fit our rawmaterial into the finished ton, right?
And so you have to remove something.
And so we cut out 25% of phosphoricacid and 30% of ammonia to make a ton.

(16:18):
And when you look at these producers,especially here domestically, they're
continuing to hit lower and lower qualityrock, which means that it's more and
more expensive and takes more and moretime to create the level of, of, of
phosphoric acid purity that's neededto go into these commodity products.
And so the bottleneck in their businessis in the phos acid production.

(16:39):
It's not granulation of tons.
And so they're making lesstons each year because it's
harder to make phosphoric acid.
Automatically, you use 25% lessphosphoric acid in my product.
So if you're not constraininggranulation, you could automatically
make 25% more tons on the samefacility with zero additional CapEx.

(17:00):
So I, thing I'm curious about,always, so Chad and I both
study the agricultural sector.
And, and the- Yeah … and thedownside of that is I feel like I-
I don't know enough about othersectors of the economy, and I sometimes
wonder how much of what I think istrue is tru- think is true about
the agriculture sector is also trueabout every other industry, right?

(17:22):
And I just happen to work inthis one or study this one.
Yeah, yeah.
And, and you sort of sit at- Hmm … thisinterface of both agriculture and mining.
Mm-hmm.
Right?
And so, and, and they bothare dealing with basically
production of bulk commodities.
Yeah.
Right?
Yep.
there, th- there's a lot ofsimilarities, but there's also
very, a lot of difference.

(17:42):
What have you… What are the thingsthat you have seen as big challenges
in the mining sector that are alsothe same in the agricultural sector?
Well, the key here is they're commodities.
Yeah.
So commodities are, it's a toughbusiness to be in, and agriculture
is a real tough business to be in.
And I think when you lookat, you know, phosphate, yes,

(18:07):
it's, it's, it's practically amining and chemicals business.
I mean, you look at agriculture,it's, you know, row crop production to
generate the food that feeds the world.
And neither of these, I think,especially over the last five years
or so, what we've seen is that none ofthese commodity markets are immune to
geo- geopolitical disruption, policydecisions, macroeconomic factors.

(18:29):
You know, you just, you name it.
you just see the ripple effects.
And I think that we're seeing that theworld is so tightly connected and supply
chains are so tightly connected and easilydisrupted, and fertilizer is not immune.
And it's, it's just, it's sucha topic within the industry.
I mean, you have one small Straitof Hormuz that shuts down, and
almost 50% of the sulfur that theworld uses comes out of that strait.

(18:54):
20% of our phosphatecomes out of that strait.
A ton of nitrogen comesout of that strait.
These are raw materialinputs, energy, oil.
I mean, you see the ripple effect.
If you think about being a farmer,all of these things impact you no
matter where you are in the world.
And unfortunately, there's alot of regions in the world that
are more victim to these, youknow, factors than, than others.

(19:17):
We in the United States, we have,we're a resource-rich country.
We have a lot of stability.
We're still a net importer offertilizer, but, and, and energy, but
we are sitting in a position wherethat ripple effect is, is, is lesser.
I mean, you go to Brazil, 85% ofphosphate's imported into the country.
I mean, it's just, it's, it's… I mean,you go to Africa and, and you don't even

(19:38):
have enough access or affordability ofthese in the low end of the commodity
curve, let alone when it's high.
I mean, the, the whole questionin Africa is how do you get them
access to fertilizer in general, nothow do you get it more efficient?
And it's just, I think that whetheryou're selling grains or whether
you're mining phosphate rock, you'restill sitting here watching something

(19:59):
completely outside of your control changeyour business and dynamics overnight.
And, when times are good, peopleare building a war chest to
survive the next seven years of thedownside of the commodity curve.
It's not a sexy business to be in,and I think that's where innovation
offers such a unique opportunity forthese commodity businesses to see real
step change in, in value creation.
And, and today that doesn't existin the fertilizer industry in really

(20:22):
any meaningful way, and I thinkwe have one of the very unique
solutions to actually provide that.
One, one thought I have is one of thethings that we've seen in mining is very,
very large consolidated interests whereeven though farms are consolidating at
a rapid rate, right, we, we know this,it is still incredibly dispersed, right?

(20:44):
they're still, relatively, right?
w- how do you think through that, right?
So, so you think about we have thesereally large, and what we would
perceive, at least in my case, large Iwould, I would believe is sophisticated
mining operations that have mining,lots of them have mining in different
c- in different continents, right?
Mm-hmm.
And then you have sort of these, you know,large sort of farms that are centered in

(21:06):
Iowa or Indiana or Illinois or Nebraska.
Mm-hmm.
Why do you think that is, right?
So they both produce commoditiesand, and, and as we teach students
about microeconomics, they, they,they have the same businesses, right?
So why did mining consolidate so fastinto we have sort of the structure

(21:26):
of the industry now versus sort ofrow crop agriculture, which I would
still say is largely very dispersed.
Yeah, and I, I mean, I think the,first of all, I think farming being
dispersed is, is definitely somethingwhere if you get down to the numbers,
when you look at the majority of acres,the majority of acres are probably

(21:48):
owned in a pretty consolidated way.
But when you look at the number offarms, there's still, and, and it's
decreasing, but there's still a, a, awide variety of number of farms, right?
so I think the average, you know,acreage in a, in a farm is around, what,
1,000, acres or something in the US.
I mean, it's-
I think it's lower than that.
We're-
I think it's lower, yeah
Yeah
…It's 500 to 1,000 acres or something like that.
Yeah
Which again, is a relatively smallfarm compared to these hundreds of

(22:09):
thousands of acres that, that you see.
I mean, by the way, you go to Braziland it's just, you can't even fathom
how large some of these things are.
I think consolidation occurs because,you know, what you see is, is that when
times are tough, these smaller farmsare the first ones to go be distressed.
And so you've got folks that areleveraging economy to scale, whether
it's buying power, whether it's access tocapital, whether it's the cost of capital.

(22:32):
I mean, you go down to, you know,bigger equipment, more efficiency,
you know, you start to consolidatethese things and you start to be able
to weather those storms a lot better.
And so when things are distressed,people go on buying sprees and,
and people are going bankrupt.
I mean, this is, the last couple ofyears have been that reality for farmers.
And, and, you know, we feel so muchfor them, especially today where,

(22:53):
you know, fertilizer prices are,are at the highest affordability
index that they've ever been.
I mean, it is so g- grain pricesin relation to fertilizer costs,
it does not make sense to applyfertilizer, yet you're automatically
going to see a decrease in yield.
And, and so how do, how do youdeal with that as a small farmer?
I mean, that impact is much harder whenyou don't have… It's just a family farm.

(23:17):
Yeah.
I, I'm, I'm not perceiving thatthere's probably many family
mining operations, in the sameway we would think about farmland-
Hard, hard times for mom-and-pop mines.
Yeah.
Yeah.
Yeah.
Well, yeah, I think that industryis probably not much different
in terms of consolidation.
I mean, you get better buying powerwhen you talk about your inputs.
You talk about distributionchannels, you know, things are,

(23:37):
are, are… We, we saw a lot ofthis across all input spaces, right?
I mean, you think about all themergers that have happened over the
last decade in agriculture to lead tothese large, large conglomerations.
But then at the same time, you'restarting to see some of these unwind.
I mean, it was really interestingto see, Corteva break up, right?
Yep.
it's interesting to see, certainmining comp- I mean, Nutrien, a
major, major ag player, is, is, hastheir phosphate business up for sale.

(24:00):
Mm.
You know, it, it's, it's,everything consolidates.
They try to, you know, benefit fromthat consolidation, and then sometimes
things, don't make sense anymore onpaper and, and they start to look
at reversing those, those mergers.
But yeah, I mean, I think in, in generalthere's a lot of consolidated, power
across all ag inputs, whether it's cropprotection, whether it's fertilizer, you
know, genetics or, or farm equipment.

(24:22):
It's, it's, it's that way, Ithink, because of the economy
of scales that come with it.
What do you think it would bereally convenient for you and your
business if farmers understoodthat thing or a host of things?
Yeah, I think first off, there is,and there's a lot of conversation
right now even at like the, you know,policymaker level about like, hey, you
know, these fertilizer companies areintentionally keeping these prices high.

(24:45):
Like, supply and demanddrives prices for fertilizer.
It's not just some price collusionof people coming together saying,
"We're gonna elevate these costs and,and keep it high for the farmers."
I think what's really telling rightnow is that I think everyone has
this perception of phosphate rightnow, that the prices are so high
these companies are printing money.
That is simply not true.
We just saw the largest phosphateproducer in the US curtail production

(25:09):
at multiple facilities, because evenat the historically high prices right
now, they simply cannot make economicsense of producing tons right now, when
their input cost of sulfur is so highbecause of the war in the Middle East.
You have the largest producer at thelowest cost curve in Morocco that is
apparently cutting production between30 and 50% because they are victim

(25:33):
to sulfur out of the Middle East.
I mean, we're gonna experiencenot just a small shortage, I mean,
I'm talking a massive shortage ofphosphate fertilizer worldwide.
That supply and demand iswhat's driving prices high.
It's not we're trying to make as muchmoney as we can off of the farmer today.
And, and again, I… my heartgoes out to the farmers.

(25:54):
I don't want this to feel like thisis an excuse, because I think that
the solution to this is efficiency.
I think the nearest term thing we cando is get more out of what we apply to
save the farmers money, and I, I am, Iam absolutely committed to that mission.
I just think that behind the scenes,there's a lot of complexity that goes into
these large commodity businesses that,that just aren't so relevant, and there's

(26:15):
a big wide disconnect between all the wayupstream and sitting at the farm level.
What, what's the time delay to, are,have we seen the effects of the,
the closing of the Strait of Hormuz?
What, where are we at in that cycle?
When you think about sort of whatthe dynamics are doing, what's your

(26:35):
projections about fertilizer prices?
And how long is this gonna persist?
Or, or have we not seen the,have we not even seen it yet?
So I think that the 2026 crop yearhas gone underway, I wouldn't say not
disrupted, but a lot of farmers madepurchasing decisions that allowed

(26:57):
them to get the nitrogen they neededin the field this, this spring.
And some did not.
It was… Now, I'm not saying it wascheap, but we didn't have a shortage
of nitrogen and, and that was clear.
My view right now is, is, farmersare fucked when it comes to
phosphate for the 2027 crop year.
there's no short-term reliefthat's coming from the producers.
There's no increase in supply.

(27:18):
There is no price alleviation.
There's no silver bullet in policy that'sgonna come in and save the farmer for
this fall application of phosphate.
And, and by the way, this has beena couple years in a row that farmers
have cut back or entirely, went awaywith application of phosphate because,
again, this idea is you can bank it inthe soil and use it later, so we just

(27:38):
try to pull from previous reserves.
There will be yield impacts, and therewill be a decrease in yields around the
world, specifically in the US, if we goanother year of cutting back on phosphate.
And the challenge is, is that the straitcould open up tomorrow, and there will
not be enough production fast enough.
There will not be enough importscoming into the country to make

(27:59):
up for this deficit we have.
And I see no hope for alleviating pricesunless we adopt things immediately in
terms of efficiency rather than thisidea of the government today socializing.
We're gonna increase production bythrowing money at new facilities.
We're going to build a fertilizer reserve.
You know, we're gonna do all these things.

(28:20):
those aren't, those aren't 2027 solutions.
Yeah.
It takes billions of dollars of CapExand many years to build a new facility.
Mm-hmm.
By the way, we're dwindling rock.
You can't just extract more and thinkthat we're gonna solve the problem.
It's, it's a really, reallychallenging environment.
And again, phosphate in particularis the, is the toughest nutrient
right now going into the 2027 year.
Is there any phosphate on Mars?

(28:43):
You know, it's funny, I jokeabout this all the time.
I mean, I think we have a, we have ahigher likelihood of starting to dredge
it out of the ocean than we do mining it-
Okay
…off an asteroid.
But, you know, look, theworld's moving in a weird place.
I, I think that, you know, wecould start pulling some asteroids
back and, and figuring it out.
We, we have plenty of phosphorus.
I do, I do wanna, I wannamake sure that's clear.
We have 300 plus years of rock on Earth.
Okay.
It's just all not equallydistributed, and that, that's the key.

(29:05):
Okay.
I'm, I'm fixated currently on shipping.
Yep.
If you wanna buy a bunch of rock, howdo you, how do you get access to that?
Who do you call, and is it,coming on a ship, in bulk?
Yeah, yeah, yeah.
Is it containers?
Just walk us through this.
what- We like to, we like the tedium.
Yeah, because I th- I think thisis fascinating to think about,

(29:25):
sort of I, I would say that asI interact with students, and,
and it comes to me too, right?
y- we love to talk about, nebulous terms.
well, sh- the shippingindustry is destr- disrupted.
But, we forget the fact that those areactual people who, who, are making phone
calls and sending ships here and here.
I think… So, talk us through that.
Yeah, look, I mean, fertilizer isa extremely complex supply chain.

(29:50):
Uh, and you can actually see behindme here, this map is an example
of trade routes of fertilizer.
These are major shipping routes.
When we talk about moving fertilizer,we're not talking about moving containers.
We're talking about moving bulkvessels, and we're talking the
biggest bulk vessels you can, youcan possibly move on the ocean.
Now, t- t- time out now.
We're just… So the bulk vessel- Yeah,
Yeah,
Yeah … That is just, basically,the c- the boat that you'd

(30:13):
play with in a bathtub, right?
Just a big, empty thing that you,pour it and fill it in, right?
So it's like a giant- Yeah,it's- … floating bottle.
It's just a giant ship where they've gotholds that they're filling up with stuff.
It's not like it's bagged.
It's not containerized.
Yeah, it's just… It's just,
Okay.
All right, cool.
Yeah, yeah.
I mean, I mean, you can move, you canmove 100,000 tons of something at a time.

(30:33):
It l- you know, I- Wow … my business,we move in, 30, 40,000 ton cargos.
That's how we move product.
Okay.
And so when I think about, youknow, I, I do overseas production.
So I make product internationally, Iput it on a big bulk vessel, I move
it into, the Port of New Orleans.
We offload it onto barges.
It moves up the river into barges.
We go off into warehouses, or we gostraight off the river into transloading
into rail cars or into trucks, and wemove stuff out to other warehouses.

(30:56):
And then it's gotta move fromthat warehouse to the farmer.
The farmer's gotta go whip it outthrough trucks with the retailer
out across the farm field.
That's the distribution center,or system for, for fertilizer.
And, you know, you're movingraw materials, so just to make
this… that's after you make it.
To make this stuff, you know, justpick on the US for a second, we're
probably importing sulfur into,say, a place like Tampa, where a lot
of our phosphate is, is mined, youknow, in the Central Florida area.

(31:19):
We're bringing in sulfur.
We're bringing in ammonia.
We're bringing in all these othermaterials- We're, we're, we're, we're
producing phosphoric acid, we'rereacting it to cr- produce product,
and some of it goes to Brazil.
Some of it goes railedup into the Midwest.
Some of it's produced in New Orleans,and we're going up the river there.
I mean, this, this is something where yougot players that are on the West Coast

(31:39):
that are making phosphate and have supplychain, you know, advantages in that market
that allow them to have certainly a lothar- higher market share in those regions
because of just where they're producingand how expensive it is to get it inland.
So I mean, when you look at thedistribution system, I mean, you have
producers, you've got wholesalers,you've got distributors, you've
got co-ops, you've got retailers.

(32:00):
You know, you've got all of thisvery complex system, and it's all
about how cheap can I make it andhow efficiently can I get it there.
And time it to where I canmake that all make sense.
And that's just the commodity business.
When we think about production, we talkto investors all the time, everyone's
like, "Why aren't you making stuff inthe US? It should be cheaper." It's
like, well, actually, not really.
I have to move my r- my rawmaterial, which is on a port, that

(32:23):
I have to put onto a bulk vessel.
I can move that bulk vessel to s-another port halfway across the world,
convert it into fertilizer and moveit back to New Orleans cheaper than
it would be to move my product inland,significantly in the US, to make product
and then move it inland by rail towhere I need to go in the Midwest.
So it's not just as straightforwardas domestic is cheaper or, you know,

(32:45):
it's cheaper to produce in China.
These supply chains, they drivedecisions and, and, and that's why
these trade routes are so complex.
Yeah, so, so if you wanted to,if we were like, "Hey, we've got
some land right here in Indiana.
We'll give it to you.
You build your plant here." Your nextstep would be like, "You're gonna
have to build me a whole railroad.
It's still gonna be cheaper forme to, to ship, do, ship back, and

(33:07):
then take it up to Indiana," right?
that's-
If I was gonna do this in Indiana,you got no domestic phosphate, or
you've got no local phosphates-
Yes, so you have to bring everything in
…so I'm gonna have to go source-
Yeah
… so I'm gonna be calling Morocco andI'm gonna be buying a cargo ship of
rock, and I'm gonna be moving it upthe river, I'm gonna be railing it
to a production site, where I'm gonnahave to import in sulfuric acid,
unless you guys are making oil locally.
Yeah.
And then I'm gonna have to bring inammonia, which unless there's ammonia

(33:29):
nearby, which again, don't quoteme on these, I'm a phosphate guy-
Yeah, yeah, yeah
… not a sulfur or ammonia guy.
But I'm gonna be bringing in theseinputs, gonna have to have this massive
manufacturing, so you guys can giveme all the tax benefits and, and, and
supportive economic development fundingyou want, these supply chains for these
materials are not gonna make senseto just bring in from all around the
world non-vertically integrated andmake phosphate domestically in Indiana.

(33:50):
Again, back to the wholeconversation around policymakers
trying to fund billions of dollarsof CapEx to build facilities.
It's not that straightforward.
It's really not that straightforward.
And, and underlying this is that yousaid 70% of the phosphate is in Morocco.
So, so that, we can't, we can'tbe like, "Nah, we're just not
gonna interact with them anymore.We're just gonna use local stuff."

(34:13):
Well, here's another policyin- interesting fact here.
So we had, as a country, the, thetrade committee essentially put
in countervailing duties againstRussian and Moroccan phosphate, and
at the time Saudi Arabia as well.
They basically said, "Hey, they havean unfair advantage, economically.
It's subsidized by the, by the government.
And so they can get product made andshipped into the US cheaper than we
can make it domestically, so we have toput a big tax on." And that was put in

(34:36):
place five, six years ago, and you know,there's a lot of debate in the industry
around that's, or whether that's right orwrong, and farmers are, are, are pretty
pissed right now that that still exists.
But it's a lot more complex than that,so I, I, again, I don't wanna take,
I'm not taking- Yeah … a position onthose- Yeah … countervailing duties.
But the reality is is that thosecountervailing duties are another
example of policy that impacts thingsthat are completely outside of anyone's

(35:03):
control, and it has a ripple effect.
Morocco is not importing any product intothe country, and hasn't for five years.
They used to be a prettybig supplier to the US.
They're not bringing anyphosphate into the US.
Wow.
So you've got the largest supplierglobally not playing in this market.

(35:24):
And so you've got more of a monopolygoing on with the couple of producers
that are here because there's not a lotof other folks that can send product
economically to the US and compete,besides Russia, Morocco, Saudi Arabia.
Those are the three major-
Geez
… suppliers.
So we, w- in economics we talkabout binding constraints, right?
So Mm-hmm … we all have thingswe're trying to do, and then
there's something that limits usfrom doing it perfectly, right?

(35:46):
And, and I think one of the things asI would interpret based on what you
said, and let me know if I get thisright at all, but phosphorus hasn't
always been a binding constraint andmaybe even isn't a binding constraint
yet, but all signs point to it could bethe next big binding constraint, right?
It could be the thing that limits ourability to do what we're trying to do.
We've heard about oil since I
Yeah

(36:07):
… since I was a kid in the 1980s.
You know what I mean?
there are things we thinkabout all the… Or good labor,
finding good people to work for.
It's that's a constraint wethink about all the time.
But man, how many of these thingsare just under the surface?
I don't know.
It's fascinating.
Yeah.
Well, I always have a unique perspe- I, Iwould consider myself a, a, an optimist.
And, and I think that just oil, right?

(36:27):
I mean energy, energy usedto be a big topic in terms of
h- how are we gonna do this?
We're so reliant on pulling thestuff out of the earth, and climate
change and all these things, right?
And I think that, as humans, I mean, we,we, we tend to solve these problems once
they become… We're aware of them, right?
And so, you know, even with thisdiscussion today, you don't think
about phosphorus and the restof the world doesn't think about

(36:47):
phosphorus, and nothing really changes.
And I've never seen in my lifetime, andI don't know if I ever will again in my
lifetime, see phosphate be such a centraltopic and all the way to the White House.
Yeah.
Globally.
I mean, this is unprecedented times,and specifically as it relates
to fertilizer, but specificallyas it relates to phosphate.

(37:08):
So is that, is that good for… for youspecifically, is that good for business?
Is it just make more uncertainty?
When you're thinking about-
Would you rather be in a quietenvironment where nobody thinks about you?
No, I, I mean, I think, Ithink it's good for what we do.
Because what we do is try to solvethe problem when the problem's
forefront in people's mindsand they wanna find solutions.
And, and I think this environmentcreates challenges and opportunities.

(37:31):
And I, you know, I tell my investorsand tell, you know, people we're
raising money from all the time, theyask the question, "How is all this
impacting your business right now?"
The challenges are the sameas every other phosphate.
I still produce phosphate fertilizer.
I'm still victim toincreasing input costs.
I'm still victim tosupply chain disruptions.
I'm still victim to policy decisions.
But on the flip side, the opportunitiesare is that people are scrambling to

(37:51):
find solutions, and they need cheaperproduct that's more efficient, that
stretches what supply we do haveaccess to further across more acres.
So I, I used to farm close to FortWayne, Indiana, which is, which
is not close to any river, right?
we, we come down to the OhioRiver to bring stuff up.
You can't even go swimminganywhere near Fort Wayne.
You can't.
So i- it… Would I know that I'm buyinga Phospho-Lutions solution, or would

(38:17):
I, would I just be buying MAP or DAP?
Is it, is it does the farmer awareof the fact that they're buying your
product, or is it a retailer decisionto sell MAP or DAP that is, I don't even
know if that's what you call it, right?
Your version- Yeah … of that.
Yeah, so our, our product is brandedRhyzosorb, is the name of it.
and so our guaranteed analysis,when you look at like MAP, it's

(38:37):
11% nitrogen, 52% phosphate.
Our product's 8% nitrogen, 39% phosphate.
Got it.
So you would be buying Rhyzosorb8-39-0, and you'd be using that
as a replacement to MAP and DAP.
And our retailer customers, a lotof them switch completely away from
selling MAP and DAP once they, they,they s- they move to our product.
Got it.
So they, as they're processing therecommendations from the retailer for

(39:00):
their fall applied or their springapplied, they may, they may not even
be aware of the sort of the phosphatesolution that they're buying is yours,
instead of sort of just a commerciallyavailable, the, the traditional product.
Yeah, I mean, it dependson how the retail sells it.
But I do think that there's alot of emphasis on, hey, you
know, you use MAP and DAP.
You're always using MAP and DAP.
We have this new product that's madethe same way as MAP and DAP, but it's

(39:22):
more efficient with this technologyinside, so you're gonna use a little
less and you're gonna get, a directcost savings this year per acre.
And, and that's, that'show it, how it's sold.
So, you know, it's sold at a premiumper ton, but it's sold actually as a
cheaper cost per acre to the farmerbecause of that increase in efficiency.
Okay, so I was a livestock producerfor 10 years, and one- Okay … of
the things that's really difficultis that utilizing the resources in

(39:43):
manure is, hist- we think that sort ofcommercially mined fertilizer is poor.
I think that animal fertilizeris, is almost worse.
Do you have any thoughtsabout sort of that?
How do we optimize the phosphatecoming out of, out of animal waste?
Mm.
Is there, is there any,or is that intriguing?
Is it Interesting inlight of this challenge?

(40:04):
Yeah, we've looked at this space a lot.
I mean, a- we actually just publisheda, a research paper after the last
five years of doing work with, Dr.Charlie White at Penn State, where
we had been applying just the raw,active ingredient, no phosphate
applied, to poultry litter and othermanure applications to the farm field.
And what we found is that actuallythrough the course of, of, of applying
our active ingredient, we're ableto support unlocking that phosphate,

(40:30):
to be used more efficiently.
And essentially, the mix between what'sin the soil or what's being applied
through manure, plus the combination ofour Rhyzorb active ingredient, essentially
can replace the need to apply MAP and DAP.
And so- Hmm … the challenge with…And again, it all comes down to the kind
of the chemistry of getting more out ofwhat is being released, and, and helping

(40:52):
unlock it, rather than keep it so stored.
And that's the challenge with manure.
I mean, the, the first challenge isyou don't have the right ratio of
nitrogen to phosphorus in manure.
And so in a lot of regions too, it's veryrestricted as to what you can apply it to.
And two, you don't get the samerelease profile that you would
with conventional fertilizer.
And so it's great to kind of buildthat bank where you just need to keep
saturating the soil to get to a levelwhere it's gonna be efficiently releasing.

(41:15):
It's not a good substitute forchemical fertilizer in most instances.
Now, it all comes down to ROI.
I mean, at the end of the day,farmers are running a business.
And so in an environment like this, it,where prices are just so astronomically
high and unaffordable, a lot of farmersare saying, "How do I…" Uh, I think
those that are in positions to cheaplyaccess more organic sources, and not

(41:37):
organic in terms of like organicallycertified, but organic in terms of
like the composition of the nutrient,are, are better positioned this year.
To not see that same yield impact toreduced applications, 'cause they can
easily and, and affordably get access to-
Yeah.
So-
… to animal waste
… they're, uh, our area, the area that I grew up in has a lot
of poultry, and so that was-

(41:59):
Yep
… uh, the, the prices of poultry litter are,you know, kinda track fertilizer prices-
Oh, yeah
…right?
Because it's, it, we substitute awayfrom chemical fertilizer, right?
It seems quickly, right?
Yeah.
Demand goes up.
Yeah, exactly.
Okay, last, last question.
I was literally walking home yesterday,and my dad, w- I was talking to my

(42:19):
dad, who's actively farming, and,and he was like, "Why is chemical
fertilizer not considered organic asit's literally mined?" Is it the- Hmm
manufacturing process that, that thatis what, why it is not considered an
organic, in the organic certification?
Do you have any insights into that?

(42:41):
Yeah, so I mean, first up,organic certification is, is
operated by regulatory bodies.
And, and there's, they're complex.
I think that the idea behind organic…first off, there's, there's very few
phosphate sources that are, that areorganic, and that presents a lot of
challenges for organic certified growers.

(43:01):
The reality is, is that, you know, you're,you're processing rock with chemicals.
And there's impurities and there'sjust… The whole idea with organic
farming is to get away from relianceon chemical inputs in a lot of ways.
And so it's, it's completelyagainst that kind of philosophy

(43:26):
to use chemical fertilizers.
And, you know, there's concern sometimesaround how it impacts soil biology
and soil health and things like that.
And so again, it's meant to more be aboutfeeding soil biology and regenerative
practices that, again, chemical fertilizerdoesn't really have the place in.
Yeah.
But again- Interesting … Ijust wanna highlight as, as a,
as a fertilizer industry guy,fertilizer is absolutely necessary.

(43:47):
There's a reason why we, wedon't have the world producing
its calories on organic farming.
Yeah
…chemical fertilizer is the reason why we can support a population
of eight billion people.
Y- you can't without it.
There's no physical way to do it.
So we'd like to end with a lightninground where we interject just-
All right.
… just some, just some quick t- topyour, top of your head answers.
You're gonna get a time machine."
Okay.

(44:07):
But you can only use it for work.
When are you going with your time machine?
So my view would be, we went from using
manure locally- Yeah to mining bat guanoto provide phosphate to then using rock.
Okay?
And we decided that rock needsto be converted into purely

(44:28):
water-soluble fertilizers, sowe built MAP and DAP production.
So that it could be instantlyreleased much faster than these
other sources that took too long,and it enabled us to do huge yields.
The funny part about everything thatwe do now in terms of technology
is trying to reduce that solubilityand slow down the release.
So what I would jump back to is beforewe started investing tens if not hundreds
of billions of dollars into phosphatemanufacturing assets that have now made

(44:51):
this a foundational input worldwide, is Iwould've started innovation back when we
started converting rock to fertilizers andtried to find the happy medium on how we
utilize this rock more cost-effectively,without all this CapEx infrastructure, to
find a balance between super soluble andcompletely insoluble, to find that balance

(45:12):
of how do we get nutrients delivered.
So that we could've not wastedthe last 100 years of depleting
this resource very inefficientlyand polluting all of our waters.
Wow.
Great answer.
All right, so what, again, work-related,what is the thing, that when you woke
up in the middle of the night youwere thinking about most recently?
Oof.
As a growing business, youexperience a lot of growth pains.

(45:32):
And, and I think for us, you know, mytriage of growth pains is, is how do
we grow our team fast enough to keepup with the success we're seeing?
How do you unlock the working capitalneeded to experience this level of growth?
And how do you continue to getthe supply and demand to, to
just hit all align on timing?
And it's a fun, fun problem to have,a very first-class problem to have.

(45:55):
Nice.
Good answer.
If, if we could al- issue a magicwand, and with that magic wand you
could know something that you currentlydon't know, what are you gonna…
What, what is the thing that you'relike, "This is what I'd like to know"?
Oof.
There's a lot of things that I don't know-I know- … that I would love to know
…I would like to know how agriculture, how AI can find its place in agriculture in a

(46:22):
way that actually adds value to farmers.
And in a practical way, not this very-
Esoteric
… existential way.
Yeah, yeah.
Yeah.
Preach.
Yeah.
Man.
Man.
I think he's, he, he did his, hedid his research on you, Chad.
So what is the most surprisingtakeaway regarding this podcast and
the fertilizer industry that youtwo are walking away with today?

(46:46):
Oh, I would go complexityof the supply chain.
Y- your, your i- I'm thinking and I willcontinue to think about sort of the ripple
effects of that we have geographicallydispersed supply and w- and, and how
that actually gets to farm fields.
If, if we literally have aconstraint on phosphate, how is
that gonna change decision-making?
That's fascinating to me.

(47:07):
I was gonna go the, another route and say-the thing that thinks to m- I think of
sort of niche problems and niche companiesaddressing those niche problems within
a universe where there are big companiesdoing broad sets of all kinds of problems.
That, I wanna spend more timethinking about that, right?
I feel like, the idea of big companiessort of just doing everything, and

(47:30):
it's "We solve-" Yeah … "rocketsand soap and whatever," right?
I, I-
Washing machines
Is that gonna continue oris it gonna shrink back?
I don't know.
I don't know.
I've, I've… Yeah.
Yeah.
Oh, I, I love it.
I love it.
Good, good question.
All right.
Great question.
Well, guys, my goal is that we, weget more views on this on Spotify
than Joe Rogan this, this week.
Oh.
And that's, that's the-
That'd be good.
Yeah, yeah.
That's the goal.
Yeah.

(47:50):
That'd be good.
That's the goal.
We will get more views on this than,than Joe Rogan views this, for sure.
That's true.
That's what we will hit.
Yeah, way more than-Oh … way more than Joe Rogan.
Yeah.
Dude, Hunter- Oh … thankyou so much, for having-
Guys, you blast
a fun conversation with us.
We appreciate it a lot.
Yes, thank you so much.
Been a lot of fun, guys.
Thanks for having me.

(48:12):
I just wanna remind you, we got anotherpodcast, coming up in about a month.
we're gonna release, try to release theserelatively regularly, where we continue
our exploration and chance to learn aboutthe ag economy directly from people out
there in the field, and, get a chance toask all kinds of interesting questions.
And similarly, Chad, remind me again, whois it that we're talking to next month?

(48:33):
Andy Campbell, who is the directorof insights for TractorZoom.
TractorZoom is also another ag company,but the similarity and difference with
the conversation we had today, it'sstill about newer startup companies
based on research, based on information,how they show, that that information
has value to other people, getting itout there, getting it into the world.

(48:53):
We also talk on the idea ofresearch collaboration between
universities and private industries.
Really fun.
Please come back.
If you get a chance, likeand subscribe this podcast.
If you know anybody inlogistics, railroad, freight,
barge freight, ocean freight-
Literally any time where you'removing grain around the world

(49:15):
physically, give us a call.
Thanks.
Thank
you.