Across the world, a major catalyst for agricultural production in recent years has been an increase of use of artificial fertilizer. There are direct economic benefits to farmers and growers who can more precisely control inputs like water, nutrients and pesticides. However, this increased application also increases demand on natural resources that come with environmental costs associated with overuse.

The “2022 fertilizer prices” is a record that shows the average cost of fertilizer in 2022. The data was collected from the USDA, which has been a major driver for farmers to start using microbes.

Record Fertilizer Prices Drive Investors, Farmers to Microbes

Alternative crop fertilizer startups say they’re gaining momentum with farmers and investors in the United States, offering themselves as a possibly less expensive choice as conventional fertilizer costs rise.

Pivot Bio, Kula Bio, and Anuvia are among the companies striving towards the development of agriculture fertilizers that use microorganisms or plant-based products to give nutrients to maize and other crops. They are intended to replace conventional fertilizers made from natural gas or mined underground, whose costs have reached all-time highs this year owing to supply-chain restrictions and Russia’s conflict in Ukraine.

While some farmers have been hesitant to abandon tried-and-true fertilizers in favor of still-developing alternatives, startup executives and investors say that rising costs for conventional nitrogen, potash, and phosphorous-based fertilizers are incentivizing farmers to try out the new products. According to AgFunder analysis, such firms have raised around $1 billion since early last year, pitching their products as more ecologically benign than traditional fertilizers.

Dan Hansen, a fifth-generation farmer in Avoca, Iowa, claims that utilizing Pivot microorganisms instead of traditional fertilizers saves him money. Mr. Hansen, who has been using the startup’s products on his 700 acres for many years, claims that he has reduced his nitrogen fertilizer consumption by around 25% and that his maize yields have increased as well.

Record-Fertilizer-Prices-Drive-Investors-Farmers-to-Microbes

Mr. Hansen claims that Pivot Bio’s microbial products are now less expensive than nitrogen fertilizer and have enhanced the yields of his corn crops.

He believes that the high cost of nitrogen fertilizers may force more hesitant farmers to consider innovative solutions like Pivot. He pays roughly 90 cents per pound for nitrogen fertilizer, whereas Pivot’s product costs about 60 cents per pound, he added.

Mr. Hansen said, “When fertilizers are cheap, men are more eager to do what they do.” “We’re compelled to venture outside of our comfort zone in these times when there are supply shortages.”

Due to supply shortages, fertilizer prices increased earlier this year, making it one of producers’ largest annual expenditures. Costs have risen even further as a result of a decline in supply from Russia, one of the world’s top exporters, as a result of sanctions imposed in the aftermath of the Ukraine invasion. At the same time, European fertilizer plants have been forced to reduce output due to increasing natural gas prices—another Russian export and a key element in fertilizer synthesis.

Investors argued that mounting constraints on the conventional fertilizer business demonstrate the need to modernize the industry and produce U.S. supplies of what some supporters refer to as clean fertilizer. According to AgFunder, Pivot, located in Berkeley, Calif., has collected more than $615 million, including $430 million last summer from investors such as Bill Gates’ Breakthrough Energy Ventures, Singapore’s state investment company Temasek Holdings Ltd., and Bunge Ltd.’s venture arm.

Pivot is a company that creates microorganisms that may be used to fertilize crops. Karsten Temme, the company’s CEO, predicted that the company’s products would be utilized on more than three million acres of land this year, up threefold from last year, and that they are frequently less expensive than traditional fertilizers.

Mr. Temme said that “the greatest issue” is persuading people that “it’s now conceivable” to financially employ alternatives to traditional fertilizers. The firm is currently increasing its sales staff as well as its research and development facilities.

Fertilizer prices have risen to all-time highs, with far-reaching implications for farmers, agricultural production, and food costs. Patrick Thomas of the Wall Street Journal outlines the reasons behind the increase and what it may mean for your pocketbook. Ryan Trefes/Getty Images

Microbe-based solutions, according to traditional fertilizer manufacturers, are promising but cannot totally replace present products. While developing alternatives can replace certain nitrogen-based fertilizers, they can’t replace others like potash and phosphate, according to a spokeswoman for Mosaic Co., which manufactures those two. Anuvia, a Winter Park, Fla.-based business that has funded approximately $170 million since early last year, has a commercial partnership with Mosaic to offer a biofertilizer product.

Mosaic, Yara International AS A, and Nutrien Ltd. NTR -3.01 percent are among the fertilizer businesses that have invested in the research and development of biological products. According to a Nutrien spokesman, the company has spent $1 billion on the endeavor over the last decade.

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Alternative crop fertilizers: Can they Take the Place of Traditional Fertilizers? Why do you think that is? Participate in the discussion below.

Bayer AG has established a cooperation with Ginkgo Bioworks Holdings Inc., a synthetic biology startup, to evaluate biological fertilizer solutions. The agreement is intended to build a solution that is more effective than what is already on the market, according to Robert Reiter, chief of research and development for Bayer’s agricultural science group.

According to James Camberato, a professor of agronomy at Purdue University, independent research on alternative fertilizers is still restricted. Before buying in bulk, farmers should test the items themselves, he advises.

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Pivot Bio fertilizer containers at Mr. Hansen’s farm maintenance facility.

Lowercarbon Capital and other climate-focused investors invested $50 million in Kula Bio, a Boston-based firm co-founded by a Harvard University professor that is aiming to commercialize cost-competitive bacteria that can store energy, remain alive longer, and increase agricultural development. Kula has received an influx of farmer enquiries, and the company now plans to begin selling goods to farmers by the end of 2022, many months sooner than initially planned, according to Chief Executive Bill Brady.

Nitricity, a San Francisco-based startup founded in 2018, is developing reactors that mimic lightning’s influence on the environment by breaking down nitrogen molecules in the air and mixing them with water to nourish crops. Lowercarbon and Energy Impact Partners were among the investors that contributed $5 million to the startup in August.


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Farmers have yet to purchase the company’s goods. Despite this, Nico Pinkowski, Nitricity’s CEO, claimed he had to take his phone number off the company’s website earlier this year owing to a rise in calls from farmers searching for lower-cost fertilizer solutions, and that some farmers even showed up at the company’s offices.

Mr. Pinkowski stated, “We’ve been completely bombarded with queries.”

Some farmers have said that they are unwilling to risk their yields on unknown items. The lives of farmers are dependent on their crops, and several venture-backed firms have failed to achieve momentum.

Before he buys organic fertilizers, Stanton Stine, a fifth-generation corn and soybean farmer near Farina, Ill., wants further evidence that they work. He claims that the startup-backed fertilizers aren’t inexpensive enough to outweigh the risks of reducing conventional fertilizer usage, and that there isn’t enough independent study to persuade him that they would improve his yield.

He said, “I’m not on the bandwagon.”

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Many farmers are still suspicious about fertilizer alternatives and are afraid to put their livelihoods on the line in order to try something new.

Patrick Thomas and Amrith Ramkumar may be reached at [email protected] and [email protected], respectively.

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

The “when will fertilizer prices go down” is a question that has been asked by many farmers and investors. The answer to this question is the microbes.

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