Approximately 700 industry representatives gathered at the Manchester Grand Hyatt in San Diego Feb. 5-8 for The Fertilizer Institute’s 2012 Fertilizer Marketing and Business Meeting. The attendance figure bested last year’s record number by at least 40.
Although the volatile urea market and softening ammonia market were certainly topics of conversation at the event, most representatives described market chatter at the event as relatively quiet. “I didn’t learn anything here that I didn’t know already,” said one, referring to pricing and supply.
Delegates heard from two keynote speakers at the event. One focused on the current challenges facing agriculture in California, while the other offered a forecast for global economics that described ongoing financial struggles for Europe, an “extraordinary shift” of global economic power from the west to China and India, and an improving U.S. outlook that is being buoyed by strong corporate profits but hamstrung by “dysfunctional” politics, the fiscal deficit, and a poor post-recession jobs performance.
Robert Powell, senior editor with The Economist, warned conference-goers to “get used to the idea that economic and political power is shifting eastward.” Powell talked about the rise of the Chinese consumer, with wage growth in that country growing by more than 11 percent annually, compared with 0.8 percent in the U.S. and 0.6 percent in Europe. He also detailed the rapid urbanization that is taking place in China, noting that the country will have 15 cities with populations of 25 million or more by 2025, and fully 200 cities that top the 1 million mark by that date.
Powell called India “the next story,” noting that it has doubled its growth rate in the last decade. He also talked of substantial economic growth in Southeast Asia, and said that Africa “may be the new frontier.” He warned, however, that the Middle East remains “complicated and unstable,” and that the Arab Spring will continue.
Powell said Europe will be in recession for much of 2012, and continues to face “hardcore austerity” measures that will weigh down growth. He warned that the breakup of the Euro-zone is a potential crisis going forward, as large areas are “simply not competitive” and past rescue strategies have failed. He said Europe’s fate rests with Germany’s willingness to respond and with another injection of liquidity from the European Central Bank.
Powell also addressed the natural gas picture, noting that the U.S. is now likely to become a natural gas exporter due to shale gas recovery. He said there is high demand for natural gas in Asia, where prices are more than five times that of the U.S. Europe’s natural gas demand is long-term bullish as well, he said.
Paul Wenger, president of the California Farm Bureau Federation, told delegates that “the next big fight” in California will likely be over fertilizer use, as the state is adopting nutrient management plans within 12 months. “It’s all about nitrates. It’s all about ground water,” he said. “This is the next big issue.”
Wenger talked of California’s extraordinary agricultural output, noting that the state produces some 350 different ag commodities. That diversity represents a challenge for a general agriculture organization like the Farm Bureau, he said, but he stressed that cooperation is needed between all facets of agriculture to “reach out and educate folks.”
Wenger said the greatest challenge to agriculture in the U.S. is not the weather or the markets, but burdensome regulations. As an example he cited California’s Proposition 2, which was approved in 2008 and drastically changed confinement standards for the state’s pou