After Friday’s close, we headed into town for coffee and breakfast, where we were also meeting some friends.

My pal is heavily involved within ecological matters here in New Zealand. I put a couple questions to him in regards to eliciting information that might indicate or influence the fundamentals of fertlizer common stocks.

In essence, soil has a very diverse ecology, consisting of animal, mineral, gaseous components. The soil will have greater or lesser quantities contained within it consistent with local geographic/geological factors and factors attributable to man.

When this soil is utilised for growing product, grains etc, the ecology is altered. The alteration might be so severe as to become a limiting factor. When this is the case, crop yields will drop.

In many cases, the limiting factor has been replaceable by fertilizer, nitrogen etc. In the early stages, crop yields will increase. As an example crop yields in Mexico initially increased four-fold, but then, dropped to only two-fold, then dropped to par, then dropped to a discount.

What had happened was that the initial limiting factor, say nitrogen, had been corrected by the application of a fertilizer, but as successive crops were planted and harvested, a secondary limiting factor became optimised. Thus, yields again dropped as this factor became increasingly dominant due to excessive planting.

Thus, the agricultural boom may have significant legs. The boom in current generation products as marketed by POT and others however will be subject to significant diminishing returns, unless new products can be developed to maintain sales.

Some interesting area’s;

*microrhizal based products [innoculation with fungi]
*genetic engineering [already under significant research]