Our Global Story

THE WORLD NEEDS MORE FERTILIZER

For years, we have been telling our stakeholders that global development is the fundamental, long-term growth driver of our business and our industry.

In the past – yesterday – we were able to report that some factors of this global development affected our business favorably, but never did the drivers of our business line up as we believed they could. Never, that is, until today. In 2007, modern agriculture stepped into the global spotlight and proved its vital role in feeding, fueling and clothing people across the globe.

As the world's largest fertilizer enterprise by capacity, PotashCorp's success now – and tomorrow – is tied to the ability of farmers around the world to respond successfully to the ever-increasing needs of nations hungry for agricultural products of all kinds. They can meet this challenge with the help of fertilizer, increasing their output to provide healthy food, renewable fuels and desirable industrial products without plowing up the parks, gardens, habitats and rainforests that protect the planet and sustain the human spirit.

FERTILIZER IS AN ESSENTIAL PART OF TOMORROW'S SOLUTION

The world needs more quality crops to provide food, animal feed, fuel and fiber for its rising human and animal populations. Available land is limited but it can grow enough to meet all these needs, even as populations rise – if it is adequately fertilized. Today, after decades of imbalanced soil nutrition in many countries, one of the most effective actions farmers can take is to add the right amounts of fertilizer, especially potash, to their soil. We believe potash will continue to grow in importance – as will our company.

Population and incomes are growing In recent years, world population has risen annually by 75 million, mainly in developing nations with emerging economies. Continued economic growth in China, India and other Asian and Latin American countries easily outpaced a slowing US economy in 2007 and drove world GDP up by nearly 5 percent. Millions of people in these countries, especially China and India, now have higher incomes and more purchasing power.	download all graphs enlarge graph
Demand for more and better food is rising Although 80 percent of the world's population still earns less than $3,000 per year, better-quality food rich in protein is becoming more common and affordable in developing countries. Studies show that as incomes in this category rise, the increase is allotted first to improved diet, particularly to meat. This has pushed up the demand for grain as animal feed. At the same time, Asia's demand for fruits and vegetables is displacing cereals from cropland.	download all graphs enlarge graph
Grain inventories are at a record low Although record amounts of grain and oilseeds were grown in the 2007/08 crop year, global consumption exceeded production, just as it did in seven of the last eight years – long before biofuels became much of an additional draw on global crop production. USDA forecasts that grain inventories will fall to just 14 percent of consumption by the end of the current crop year, the lowest level ever recorded and not enough to feed the world for two months. Stocks of rice and soybeans are also falling.	download all graphs enlarge graph
Sustained high crop prices support fertilizer demand In response to strong demand, prices of almost every globally significant crop rose substantially in 2007, often to record levels. This encouraged farmers to maximize yields by optimizing fertilizer applications. Futures prices for corn, soybeans and wheat in 2009 are more than double 2006 levels.	download all graphs enlarge graph
Farmers' investment in fertilizer pays off Everywhere that crops are grown, the economics of buying and using fertilizer are compelling. The excellent value it provides for the world's farmers was confirmed by a recent International Plant Nutrition Institute (IPNI) survey, which took into consideration higher crop prices and much higher fertilizer costs. Most crops in the survey returned more than $3 for every $1 invested in N, P and K fertilization. Oil palm from a mature Malaysian plantation returned $9 per $1 invested in fertilization.	download all graphs enlarge graph
More fertilizer required to nurture soils for more crops Crops are nourished by nitrogen, phosphate and potash. Applied to the soil in the right quantities at the right time, these nutrients work synergistically to improve yields, quality and disease resistance. Historical under-application of fertilizer – especially potash – by farmers in countries like China, India and Brazil has led to chronic low yields there. These farmers are now investing in fertilizer. Potash fertilizer consumption grew annually by an average of 5.6 percent in the last five years, phosphate by 3.8 percent and nitrogen by 2.7 percent, and more growth is expected.	download all graphs enlarge graph

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